Israel to Divest Stakes in Major Defense Firms to Fund Military Expenditure

Israel is preparing for the partial privatization of its two largest state-owned defense companies to offset the costs of expanding military operations. The government intends to sell stakes of up to 30% in both Israel Aerospace Industries Ltd. (IAI) and Rafael Advanced Defense Systems Ltd. by the end of the year. Israel Aerospace Industries is expected to begin trading on the Tel Aviv Stock Exchange. According to an official familiar with the matter, the company carries an estimated valuation of approximately 100 billion shekels, or roughly $34 billion. Simultaneously, the government is arranging the sale of a stake in Rafael Advanced Defense Systems. This transaction is likely to be executed as a private placement through TASE UP, with the firm's estimated value placed at 60 billion shekels. These divestments highlight the growing fiscal pressure on the Israeli state as it seeks sustainable funding for its defense infrastructure amidst ongoing regional tensions. By introducing private capital into these strategic assets, the government aims to secure the necessary liquidity to maintain its military readiness while potentially increasing the operational efficiency of these key suppliers.