News Analysis – December 2018

General News Summary

Tunnels, Rockets and More

Operation Northern Shield, launched in early December, is aimed at destroying a series of attack tunnels built by Hizballah under the Lebanese-Israeli border. Three had already been located and eliminated by mid-December. Their planned use, Israeli sources say, was a key element in Hizballah leader Sheikh Hassan Nasrallah’s threat to “conquer the Galilee” in a future war with Israel.

Nasrallah’s plan, Israeli sources say, far exceeded sending a few cells of attackers across the border for a surprise attack on a single community. Instead, they could facilitate the quick and secret transfer of hundreds of fighters from southern Lebanon into Israel, laying the groundwork for a wider ground offensive whose aim would be to occupy and hold a substantial swathe of Israeli territory, even though Hizballah, which has no air force, would not be able to maintain that foothold for an extended period.

The Israeli campaign, to which there has so far been no military response, may have short-circuited this element of Nasrallah’s presumed plan. But it does not affect the principal threat to Israel’s security from Hizballah’s rocket arsenal that has grown exponentially in the decade-plus since the Second Lebanon War of 2006. Israel estimates that Hizballah had about 15,000 rockets in 2006, firing 4,000 of them in the 34-day conflict. That number is thought to have increased almost 10-fold, to a current 130,000, including more advanced models supplied to it, despite Israeli efforts to stop it, from Iran.

Meanwhile Lebanese President Michel Aoun, a Hizballah ally, has been quoted as saying that the Israeli operation would not endanger calm along the Israel-Lebanon border.

Chad… and More

Prime Minister Benjamin Netanyahu is expected to visit Chad in the near future, to formally restore relations with the African country. The visit was announced in late November, when Chad President Idriss Deby became the first leader of his country to visit Israel since diplomatic relations broke off in 1973.

The visit came among reports that Netanyahu would visit Bahrain sometime in early 2019, and of warming up relations with Sudan. In addition, Chad’s interest in purchasing sophisticated Israeli arms, as the two countries share the threat of Islamic jihadi-style terror from domestic groups inspired by the ISIS/Daesh model including Boko Haram. That model, combined with the Iranian threat shared with countries that include Saudi Arabia, seems to be the base behind Netanyahu’s claims about the unprecedented state of Israel’s relations with a growing segment of the Muslim world.

In mid-December, Netanyahu announced that Oman has agreed to allow El Al, Israel’s national air carrier, fly over its airspace. The decision has little operational significance, since Israel aircraft are currently not allowed into the airspace of countries around the Gulf emirates.

According to a recent report, Netanyahu is seeking to stabilize relations with both Sudan and Nigeria, in addition to Chad. Overflight rights with the three African countries, in addition to Egypt, would shorten flight time from Israel to South America by about three hours.

Kashoggi Ambivalence

Prime Minister Benjamin Netanyahu explained what was behind Israel’s failure to condemn the brutal murder of Jamal Kashoggi in mid-December, calling the killing of the Saudi journalist in Istanbul “horrific”, but adding that Israel’s response had to be balanced because of “the importance of Saudi Arabia and the role it plays in the Middle East.” It had to be taken into account, the Israeli leader warned, that the destabilization of Saudi Arabia would have a negative effect on world stability. Israel has been one of the few Western countries to avoid direct criticism of the murder at the Saudi consulate in Istanbul.

Saudi Crown Prince Mohammed bin Salman, who is widely considered to bear responsibility for the Kashoggi killing, is widely thought to play a central role in Netanyahu’s much-heralded plans for improved relations with moderate Arab states concerned about Iran’s regional ambitions. MBS, as the prince is commonly known, reportedly spoke at length about the relationship between his country and Israel in an off-the-record conversation with an American delegation visiting Riyadh in November.

There has been no official acknowledgment of Israeli-Saudi contacts. That may change soon, according to a report on Middle East Eye, a website covering regional affairs.

According to the website, MBS is floating the idea of a “game-changing” summit meeting with Netanyahu, perhaps hosted by President Trump, which would be comparable with Israeli Prime Minister Menachem Begin and Egyptian President Anwar Sadat’s 1977 Camp David meeting which eventually led to a peace agreement between the two countries. The idea for such a summit was raised by a task force MBS appointed, tasked with finding ways to blunt world condemnation of the prince for his possible role in the Kashoggi atrocity. A public breakthrough with Israel, casting MBS as an Arab peacemaker like the late President Sadat, would soften hostility towards him, particularly in the U.S.

The Middle East Eye report has not been confirmed by other sources and it’s not the first time the website, based in London and funded by Qatar, has made hard-to-verify claims related to the Kashoggi case. In mid-November, the website claimed that MBS had tried to push Netanyahu and Israel into war with Hamas in Gaza, in another move to turn the world’s eyes away from the Kashoggi episode. Saudi Arabia broke off diplomatic relations with Qatar almost two years ago, over the emirate’s relationship with Iran.

Lieberman Resigns, Government Survives

Prime Minister Benjamin Netanyahu’s government survived the surprise resignation of Defense Minister Avigdor Lieberman in mid-November, remaining in power after Lieberman’s Yisrael Beitenu party left it with a bare 61-seat parliamentary majority in the 120-member Knesset. Lieberman left after 29 months in Defense in protest of a cease-fire with Hamas in Gaza, saying that by doing so, Israel was buying short-term quiet while doing severe damage to long-term security.

The Netanyahu government avoided another blow when Education Minister Naftali Bennett, who said he’d take his Jewish Home party out of the coalition if he did not succeed Lieberman at Defense, dropped his ultimatum. Bennett who had demanded even stronger action than Lieberman in Gaza, said he’d stay on after a speech in which Netanyahu said he would also act as defense minister in an effort to resolve Israel’s “deep security crisis.”

Despite the immediate relief, it still appears that Netanyahu is interested in moving up elections from their scheduled date next November to sometime in the late spring. One consideration involves pending corruption cases against the prime minister. It seems Netanyahu would prefer going to the polls before any criminal indictments might be filed.


Even after an informal Palestinian agreement on a staged deal to lower tensions on the Gaza border, mass demonstrations continue Fridays along the border fence with Israel. Commentators say that Hamas has been seeking to compensate for the lowered level of border violence and the loosening of Israeli restrictions of shipments into Gaza that are part of the agreement by urging terror attacks against Israeli soldiers and settlers in the West Bank. In early December, Hamas carried out several attacks in which three Israelis, including a baby delivered prematurely after his mother was shot while standing at a bus stop, were killed. Khaled Mashaal, the former head of the Hamas political bureau outside of the West Bank and Gaza, in early December called on West Bank Palestinians to engage in “guerrilla warfare” that would eventually force Israel out of “all of Palestine.”

Kochavi New C-O-S

Maj.-Gen. Aviv Kochavi has been approved as the Israel Defense Forces next chief of staff, succeeding Lt.-Gen. Gadi Eizenkot, who completes his four-year term in early 2019. Kochavi, 53, the current deputy C-O-S, previously was head of the IDF Northern Command. His appointment was made by Avigdor Lieberman before his resignation as defense minister. Shortly after replacing Lieberman as acting defense minister, Prime Minister Netanyahu, the new defense minister, announced the appointment of Maj.-Gen. Eyal Zamir, who previously headed the IDF Southern Command and was the prime minister’s deputy chief of staff and military secretary.

Moon Donor

Sylvan Adams, a Canadian Jewish billionaire, has donated $5M to SpaceIL, the Israeli non-profit seeking to land the first Israeli-made unmanned spacecraft on the Moon. Adams announced the donation Sunday during a tour of Israel Aerospace Industries Ltd., where SpaceIL’s spacecraft is currently undergoing advanced testing. SpaceIL, founded in 2011, one of the five finalists for Google’s Lunar X Prize, said it would continue its lunar project after the competition ended with no winner. SpaceIL expects to launch its unmanned spacecraft in early 2019.

Ramon Airport

Flights are due to begin taking off and landing at the new Ramon Airport, 12 km north of the southern resort city of Eilat, early in 2019. The airport, built at a cost of about $500M, has an anticipated capacity of about 2 million international passengers a year. It is named for Ilan Ramon, the Israeli astronaut who lost his life in the 2003 Columbia space shuttle disaster, and his son Assaf, who died during fighter pilot training in 2009.

Iranian ‘Fake News’

ClearSky Cyber Security, a Tel Aviv-based start-up, says it has uncovered a global network distributing pro-Iranian fake news. In an early-December report, ClearSky said the network included at least 98 fake media outlets, each equipped with its own website and social media accounts, operating in 28 countries in 29 languages.

Ex-General Sanctioned by U.S.

Israel Ziv, a retired Israel Defense Forces major-general, has denied any involvement in illegal arms sales which resulted in the imposition of sanctions against him. The U.S. Department of the Treasury accused Ziv of using his agricultural projects as a cover for selling $150M worth of light arms, including rifles and rocket launchers, to the South Sudanese government. Ziv said his company was only involved in agricultural projects to help the impoverished South Sudanese population.


The Economy

CPI Falls

Israel’s Consumer Price Index for November declined by 0.3%, after increasing 0.3% the previous month. The fall, which was larger than expected, was attributed largely to falls in world market and lower leisure prices, which traditionally go down after the autumn Jewish holiday period. The October increase was behind the Bank of Israel’s decision to raise Monetary Committee raised the basic interest rate by 0.15 basis points, the first increase since 2011. Nadine Baudot Trajtenberg, serving as the acting governor of the central bank until new governor Prof. Amir Yaron was due to take over in December, said the move was taken to stabilize the inflation rate inside the target range.

Deficit Up

Israel’s government budget deficit rose to 3.6% of Gross Domestic Product in November 2017-October 2018. The result, announced by the Finance Ministry in mid-November, was NIS 9B higher than the planned 2018 deficit of NIS 38.5B deficit, which would have amounted to 2.9% of GDP. The change, officially attributed to technical reasons, was also due to a decline in tax revenues. Despite the change, the Treasury has expressed confidence that the final deficit for all of 2018 will amount to only 3-3.2% of GDP.

Growth Slows

Israel’s economy grew by only 2.3% in the third quarter of 2018, the Central Bureau of Statistics reported in late November. The growth fell short of the predicted 2.5-3%. At the same time, the CBS downgraded its growth estimates for the first quarter from 5.1 to 4.6%, and for the second quarter from 1.8% to 1.2%. Economists said the figures indicated that the annual growth estimate for all of 2018, of 3.7%, would be hard to reach.

Tourism Rises

3.8 million tourists visited Israel in the first 11 months of 2018, making it almost certain that tourism to the country will exceed 4 million by year’s end. The total included 389,000 in November, up 35% from November 2017.

Forex Reserves Up

Israel’s foreign exchange reserves at the end of November 2018 stood at $115.056B, up $1.145B from October, the Bank of Israel said. According to Globes business daily, the reserves represent 31.4% of GDP.

Chinese Potash Contracts

Israel Chemicals has signed new contracts to supply 3 million tons of potash to Chinese customers. The agreed price, at $290 per ton, is almost 25% more than previous agreements with Chinese customers.

Other Chinese Deals

StoreDot, a Herzlia-based developer of fast-charging batteries for portable electronic devices and electric-powered automobiles, with Eve of Shenzen, China, for production of the Israeli firm’s products in China and EyeClick, a developer of an interactive gaming platform that can be projected only any open space, has reached an agreement with Guoshow Technology of Beijing for the export of EyeClick’s products and opening of a production facility in China.

No More Coal By 2030?

Use of coal to generate electricity will be eliminated completely by 2030, according to a plan announced in mid-November by Energy Minister Yuval Steinitz. The plan also includes a ban on import of cars using pollutant fuel, beginning in 2030.

The plan is more optimistic than projections by the Public Utilities Authority, which estimates that coal will generate 13% of the electricity consumed by Israel in 2030.

New Gas Auction

Israel will seek to sell offshore gas exploration rights in a second auction sometime next year, Minister of Natural Resources, Energy and Water Resources Yuval Steinitz announced in mid-November. In a similar auction a year ago two companies, Energean of Greece and India’s ONGC, won 6 of a total of 20 blocks offered for sale. Bids in the new tender are due by next summer. Delek Drilling, controlled by Yitzhak Tshuva, and Noble Energy of the U.S. will not be allowed to participate in the bidding because they hold rights to over 20% of the total amount of Israel’s gas.

Gas Pipeline

Israel, Cyprus, Greece and Italy have reached agreement on laying a gas pipeline connecting the Eastern Mediterranean gas fields with Europe. The pact, reached after two years of intense negotiations, could mean that the pipeline will be in operation as soon as 2025. Estimated cost: about $6B.

Israel Joins FATF

Israel has been accepted as a full member of intergovernmental organization Financial Action Task Force (FATF). Founded in 1989 as an initiative of the G7 countries — Canada, France, Germany, Italy, Japan, the U.K., and the U.S. — FATF develops policies to combat money laundering and terrorism funding. Israel is its 38th member.


Aerospace & Defense

IMI Privatization Completed

Private defense contractor Elbit Systems in late November completed its privatization purchase of IMI Systems, the former Israel Military Industries. Price for the former government company, sold after an extended process that took 17 years, was NIS 1.8B (about $500M). Shortly after the transaction was completed Avi Felder, IMI’s CEO since 2005, informed Elbit’s management that he was resigning.

IAI Privatization Pushed

Prime Minister Benjamin Netanyahu is pushing for privatization of government-owned Israel Aerospace Industries, the country’s largest defense contractor, to take place in 2019, according to a report in Yediot Aharonot‘s economic section. The paper says that Netanyahu told Udi Adam, director-general of the Defense Ministry, where Netanyahu is now the acting minister, and Government Companies Authority director Yanki Quint to prepare a proposal for a share issue in a sale that would not compromise vital security interests. The proposed plan would not be the first for sale of IAI shares; in 2014 the government authorized sale of 25% of IAI’s equity based on a company valuation of $4B, a plan that has never been implemented.

Israel’s Laser Cannon

IDF, reportedly is developing a laser cannon designed to intercept mortar shells and other short-range munitions. According to a report in the local press, tests have already been conducted and the project is in a “very advanced stage.” Rafael Advanced Defense Systems, the initial pioneer of its successful Iron Dome system, uses missiles to intercept incoming munitions, was developed and deployed.

In 2004 the Nautilus, the laser-based system Tactical High-Energy Laser (THEL) developed cooperatively by Israel Aerospace Industries, Rafael Advanced Defense Systems and Tadiran and U.S. aerospace contractor Northrop Grumman, successfully intercepted an incoming test rocket at the White Sands range in New Mexico. Development of the system was considered impractical, however, due to the problem of integrating the energy necessary in a military system. That problem appears to have been solved, according to Prof. Yitzhak Ben-Israel, a retired IDF general who heads the Israel Space Authority.

In an early-December radio interview, Ben-Israel referred to an unprecedented technological breakthrough about a year ago, enabling a system about the size of a truck that can be moved from place to place, create a laser beam and fire it at rockets or even in the case of a laser, at a mortar projectile, which was not airborne long enough for interception by existing rocket-based defense systems. Ben-Israel said that such a system could be paired with the existing Iron Dome anti-missile to create a powerful combination.

Cost of intercepting incoming munitions with lasers, excluding the cost of building the system itself, would be much lower, Ben-Israel said – $1,000-2,000 per interception, compared with $50,000-100,000.

Laser weapons systems are already in service in Russia. The Russian Defense Ministry’s Krasnaya Zvezda newspaper reported in early December the start of deployment of Peresvet laser cannon to Russian Army combat units. Details of the weapon were not disclosed, other than the claim that it is able to destroy targets “within fractions of a second.”

Defense Budget Increased

Israel’s Finance Ministry authorized a NIS 1.3B (about $370M) increase in the defense budget in mid-November, bringing defense expenditure for the year to NIS 57B. No explanation was given for the additional expenditure, which came shortly after an across-the-board cut of other ministries’ budgets to finance pay raises for police and other internal security personnel.

IAI-Boeing Pact

U.S. aerospace giant Boeing and government-owned Israel Aerospace Industries signed a cooperation agreement in late November. Boeing is expected to provide IAI with contracts connected with Boeing sales to Israel and the Israeli military in the future, and cooperation in contracts with non-Israeli customers.

Cooperation between the two companies is not a new thing. In addition to working together on the development and manufacture of the Arrow anti-missile and parts for commercial airplanes, IAI supplies Boeing with complex assorted parts and assemblies for Boeing 787, tail assemblies for 777, and 777X, and components for F15 warplanes.

Meanwhile, Globes reported that IAI may be considering closing its Ramta division’s plant in Beersheba, which makes warships for the Israel Navy and components used in executive jets manufactured by IAI. Closure of the plant would leave Israel Shipyards as the only domestic ship maker for the Israel Navy.

Elbit’s India Deal

Ashok Leyland, the largest supplier of vehicles for the Indian Army, will provide high mobility vehicles for mounting artillery and other systems produced by private defense contractor Elbit Systems. The memorandum of understanding was signed not long after Elbit completed the privatization acquisition of IMI Systems, a developer of artillery and rocket artillery systems.

Herons for Hanoi

Israel Aerospace Industries has sold three Heron Type 1 unmanned aerial vehicle (UAV) systems to Vietnam for a reported $60M. According to media reports, the UAVs will have extreme weather and automatic take-off capability and will be used for routine missions including maritime patrol. The Herons have a range of 50 km, stay aloft for up to 50 hours and carry payloads of up to 250 kg.

Elta “Guards” G20

Elta Systems, a subsidiary of Israel Aerospace Industries, has won a contract to provide a drone detection system to Argentina. The Drone Guard system, which can be used to detect, identify, and disrupt unmanned aerial vehicles, can be used for securing large-scale international events, including the 2018 Youth Olympics and the G20 Summit in Buenos Aires.

Rafael Guards Cyber

Argentina has purchase a $5M cyber protection system from Rafael Advanced Defense Systems, according to a report in Yediot Aharonot. The system can monitor Internet activity, including Darknet, the hidden and isolated part of the network that is often used for criminal and subversive activity, for drug and weapons trafficking. It is capable of monitoring network and communications activities, protecting digital arrays and equipment that is operated and connected to the network.

Asian Contract

Elta Systems has won initial contracts from an Asian customer to supply advanced multi-mode radar and an electronic warfare protection system, both based on latest active electronically scanned array (AESA) technology. The combined contracts are worth over $60M. The products provide the customer’s air force fighters with high-performance radar sensors and maximum protection against potential ground and airborne threats.

Shorter IDF Service

The Finance Ministry is studying a model that would shorten compulsory IDF service for men to two years, equal to that of female conscripts. Men in elite service would serve an additional six months in the regular army. According to a report in the daily Haaretz, such a move would save NIS 10-12B a year. Army service for men was reduced from three years to 32 months in 2015 and is due to become 30 months in 2020. According to the Haaretz report, the Finance Ministry has been told that military preparedness would not be affected by an additional reduction, to 24 months.

Big Asian Contract

Israel Aerospace Industries has been awarded a $550M contract to provide its Sky Capture air-defense system to an unnamed Asian country. A command-and-control system for anti-aircraft systems, Sky Capture is designed to upgrade and improve the accuracy of legacy air defense systems with information fusion based on multiple sensors, advanced fire control and detection radars and electro-optical sensors all made by IAI and its Elta Systems subsidiary.

Seoul Buying Green Pine

South Korea is purchasing two Green Pine early-warning radar systems, made by IAI’s Elta subsidiary. In announcing the decision, the Seoul government’s defense procurement agency said the purchase was designed to detect hostile missiles “at an early stage,” without mentioning the most likely missile threat comes from North Korea. Estimated cost of the two systems: about $290M.

Elbit Gets Asian Contract

Private defense contractor Elbit Systems has been awarded a $167M contract to provide a comprehensive aerial intelligence, surveillance, reconnaissance and target acquisition system to an unnamed Asian country. Delivery is due to be completed within 20 months.

Elbit also won another contract, valued at $112M, to supply advanced airborne intelligence systems to another unidentified Asia Pacific country.

Elbit’s 4th Romanian Plant

Elbit Systems recently opened its fourth production facility in Romania, near Bucharest. The new facility will operate as a production and integration center for Elbit turrets and weapon stations contracted to local and regional customers.

General Atomics Gets UAV Deals

General Atomics of the U.S. was chosen over Israel Aerospace Industries for two major unmanned aerial contracts in late November, a $1B sale to Australia and a $230M Belgian deal. In both cases, IAI offered Heron TP aircraft to the potential clients.

Drone Detection Upgraded

IAI’s Elta Systems has unveiled an enhanced version of its Drone Guard system, which detects, identifies and disrupts the operation of small unmanned aerial vehicles. The new modular configuration of Drone Guard adds a Communication Intelligence system for more precise detection, classification and identification based on broadcast frequency and unique communication protocol analysis and verification for neutralizing threats.

Elbit Gets EMSA Deal

Elbit Systems has been awarded a framework contract to provide maritime Unmanned Aircraft System (UAS) patrol services to be provided by the European Maritime Safety Agency (EMSA). Under the terms of the two-year contract valued at about $58M, Elbit will cooperate with CEiiA of Portugal who will lease and operate its Hermes 900 Maritime Patrol and its Ground Control Station, featuring maritime radar, satellite communications and automatic identification systems to spot suspicious activities and potential dangers.

Stab-Resistant Gloves

Israeli Border Police officers have been provided with a new protection against single-assailant terror attacks, star-resistant gloves developed according to its specifications by Agilite, a specialist in tactical defense gear based in Holon just outside Tel Aviv, and manufactured by Mechanix Ware of the U.S. One finger of the gloves, developed after extensive research and testing, is exposed to pull the trigger of a gun.

Eitan For Export – Eventually

After extensive testing with the celebrated Nahal infantry brigades, production of Israel’s new Eitan 8×8 armored personnel carrier will be offered for export after enough are produced to replace the M113s currently in IDF service. The 30-ton, 8-wheel drive APC has a 30-mm turreted cannon and a built-in active protection system, a crew of three and space to carry 9 infantrymen and all their equipment. The vehicle was developed as an alternative to the U.S.-made Stryker, which did not meet all the Israeli army’s operational requirements. According to the Breaking Defense website, 60% of the vehicles will be produced in the U.S. due to restrictions on how Israel can spend American military aid.

Cyber, Aviation Consortium

Israel’s Ministry of Economy and Industry has launched a new cyber consortium for the aviation industry, in cooperation with Israel Aerospace Industries, CyberArk, Check Point, Cockpit Innovation, Karamba Security and ClearSky. The consortium plans to offer a broad range of aviation, security, intelligence and cyber solutions for the global market from established firms, as well as cutting-edge cyber products and technologies from start-up companies. Its goal is offering comprehensive, end-to-end, cyber security solutions for the commercial aviation industry: airports, airlines and aircraft.

Aeronautics Revenue Falls

Aeronautics, the maker of unmanned aerial vehicles based in Yavne, southeast of Tel Aviv, reported a 23.7% decline in third-quarter revenues and losses totaling almost $3M.

More F-15 for F-15I?

According to reports on the news, the Israel Air Force is considering the purchase of a squadron of F-15IA aircraft and delaying delivery of its F-35 warplanes on order from the U.S. In mid-November, the 12th F-35, codenamed Adir by the IAF, arrived in Israel. In all, Israel has purchased 50 F-35s, the last of which is scheduled to be delivered sometime in 2022.

U.S. Interest in IAI Robots

Officials of the U.S. Tank-Automotive Research, Development & Engineering Center (TARDEC) have a deep interest in robots produced by Israel Aerospace Industries, according to a report on the Breaking Defense website. The website quotes reserve major-general Gadi Shamni, IAI’s vice-president for land systems, who says the Americans have expressed interest in a number of systems, including robotic “mules” to carry supplies on the battlefield, unmanned vehicles that can be used to lead convoys, robotic bulldozers that can operate under hostile fire, and armed robots.

Eitan Turret Trials

The Ministry of Defense has successfully completed the first stage of field trials on the Eitan unmanned armored personnel carrier (APC) turret. In the trials, at the Weapons Test and Evaluation Center, Spike anti-tank missiles were launched against a range of targets and other operational functions of the new turret were tested.

The development program is led by the Ministry of Defense’s Tank and Combat Vehicle Administration. The unmanned turret, mounted with a 30mm artillery gun, will allow the APC’s crew to respond to battlefield challenges while protecting them from enemy fire.

Chinese APS

China recently unveiled an active protection system for armored vehicles that observers say is very similar to Rafael Advanced Defense Systems‘ Trophy. The GL5 APS, made by China’s Norinco, was unveiled in November at China Air Show 2018, held in the city of Zuhai in Guangdong Province in southern China.

Cropdusting Collaboration

Israel Aerospace Industries and Tama of Mishmar Haemek, one of Israel’s largest kibbutz companies, have formed a company to operate unmanned aerial vehicles (UAVs) to spray agricultural crops. The company, ART, will engage in spraying, fertilizing and seeding. According to Yediot Aharonot, Tama is investing $14.5M in the new company and will own 55% of the equity.

Top Tanks

Two models of Israel’s Merkava 4 battle tank, the Barak and Merkava M, are among the world’s 15 most advanced and best performing tanks in a list published by the Army Recognition website. Other tanks on the prestigious list are from Russia, China, Germany, France, the U.K., Turkey, Argentina, South Korea, Japan and Iran, according to a report published on the Israel Defense website. Army Recognition rates Merkava M (Windbreaker) as the most advanced of Israeli armor, equipped with the Trophy advanced protection system, effective against anti-tank missiles including the Kornet.

Naval Engine Sale

MTU America of Brownstown Township, Michigan, was awarded a $7.9M contract to provide a variety of naval engines. A supplier of engines to the Israel Navy, MTU engines are installed in a number of vessel types, including Saar-5 missile boats and Dolphin-class submarines.


Finance & Investment

Start-Ups Raise $5.7B

Israeli start-up companies raised about $5.7B in the first 11 months of 2017, according to estimates published in early December by Globes. The figure includes $600M raised in November and $500M raised in October, in addition to $4.6B for the first 9 months of 2018. According to IVC Research Center, the largest deal included in the sum was $125M raised by Trax Solutions, followed by $75M for artificial intelligence specialist, developer of the world’s fastest artificial intelligence chip, and $63M by Valens Semiconductors.

Leviev’s Debt

Diamond mega businessman Lev Leviev owes more than NIS 500M to Israeli banks, according to an investigative report published by Globes in mid-November. The debt is the remainder of loans amounting to NIS 1B Leviev borrowed to purchase Africa Israel Investments. After two debt arrangements, Leviev last year lost control of Africa Israel to businessman Moti Ben Moshe.

Arison Begins Hapoalim Sell-Off

Shari Arison has begun the planned sale of her 20% controlling stake in Bank Hapoalim, according to a report in Globes. Arison, whose total stake in the bank was worth more than NIS 7B (about $3B) sold 50 million shares in a deal worth about $300M. Distribution of the shares is being undertaken by Barak Capital.

Arison’s holdings in the bank, Israel’s largest, date back to the late 1990s, when her late father Ted Arison and a group of investors acquired a controlling share from the Israeli government, which had purchased them as part of a bailout after a bank share crisis in 1983.

Sagi Exits Playtech

Israeli businessman Teddy Sagi no longer has an interest in Playtech, the online gaming company he founded 19 years ago. The sale of Sagi’s final 6.4%, through Credit Suisse, is in keeping with Sagi’s planned concentration on investments in real estate and technology. Based mainly in London, Sagi’s investments include London’s Camden Market.

Campus Acquired

Isras Investment Co. has acquired the Neve Ilan Media and Communications Campus near Jerusalem from Reality Fund for NIS 298M. Channel 2 TV news company studios are among the tenants of the site, near the Abu Ghosh village.

Crowdfunding Plus

OurCrowd, the Israeli venture capitalist crowfunding specialist, says that its planned early March Global Investor Summit will be the largest gathering of its kind in Israeli history. The Jerusalem-based firm, headed by Jonathan Medved, says it expects an enrollment of more than 15,000 from 120 countries, over 1,000 start-up entrepreneurs, 300 venture capital firms, 400 international firms and a large number of independent investors to attend the week-long event in Jerusalem.

Alibaba Backing

Chinese e-commerce giant Alibaba has taken part in a $40M financing round for Optibus, a Tel Aviv-based developer of fleet management and optimization software that supplies public transit operators with recommendations based on real-time data. Optibus, founded in 2014, offers its services in more than 200 cities worldwide.

Alibaba’s recent Israeli investments include Nexar, an auto computer vision start-up; Israel-based data analytics startup SQream Technologies; reality hardware company Lumus; augmented reality software start-up Infinity Augmented Reality Israel; and Twiggle, which developed a specialized ecommerce search engine.

Arab-Israeli Start-Ups

About 30 Arab Israeli firms displayed their technologies to potential investors from the U.S. at the first U.S.-Israel Investor Conference for Arab Israeli Start-ups, held in Nazareth in mid-December. The project, a joint initiative of the Israel Ministry for Social Equality and the U.S. Embassy, sought to demonstrate the capacity of Arab firms to take part in Israel’s expanding high-tech scene. According to a report in the Times of Israel, Arab Israelis hold 3% of the jobs in local high-tech, three times as much three years ago. About 2,000 Israeli Arabs graduate each year in computer science and engineering.


Mergers & Acquisitions


Mueller Water Product of Atlanta, Georgia, says it has signed a definitive agreement to acquire Krausz Industries for $140M in cash. Tel Aviv-based Krauzz, which was founded in 1920, produces pipe couplings, grips and clamps.

Spyware Merger in the Works

Two Israeli companies specializing in cyber spyware are considering a merger, according to a report in Globes. The NSO Group, headquartered in Herzliya, which specializes in spyware software to track individuals through their cellphones, is considering the purchase of Fifth Dimension of Tel Aviv, developer of a tracking system used by law enforcement and security agencies.

Together Buys German Firm

Together Pharma, an Israeli firm dedicated to growing, exporting and distributing medical cannabis has begun operating in Germany’s medical cannabis sector. According to a report in Globes, Together has agreed to acquire control of an unnamed German company which has a license for narcotic treatments from Germany’s Ministry of Health. Together is paying 2M € for 50.1% of the German company.

Elad Canada-Agellan

Elad Canada, the real estate arm of Israeli magnate Yitzhak Tshuva’s, has acquired control of Agellan, a Canadian real estate firm, for $297M. Elad previously held 19% of Agellan.


Checkmarx has acquired the Ontario-based software security company Custodela, for an undisclosed sum. Based in Ramat Gan just outside Tel Aviv, Checkmarx develops and markets cybersecurity technology that automatically scans code to detect security breaches. The company has 400 employees around the world, in countries that include the U.S., Brazil, Singapore, Portugal, the U.K., France and Germany.

Symantec-Javelin Networks

Symantec, the Mountain View, California-based Fortune 500 cybersecurity firm, has purchased Javelin Networks of Tel Aviv for an undisclosed sum.  Founded in 2014, Javelin Networks also has offices in Austin, Texas, and Palo Alto, California.

Beit Shemesh Engines-Carmel Forge

Beit Shemesh Engines is acquiring Carmel Forge, an Israeli manufacturer of parts for aircraft engines, for $58.5M, according to a report in Globes. The seller is Pratt & Whitney, a division of United Technologies Corp. Carmel Forge, which has a plant in Tirat Hacarmel near Haifa, supplies components to a number of manufacturers of jet aircraft engines.

Medtronic-Nutrino Health

Medtronic, one of the world’s largest medical technology companies, has acquired Tel Aviv-based Nutrino Health, a specialist in nutrition-related data services and analytics. No purchase price was announced, but Globes estimated it at around $100M. Nutrino, which will become part of the Diabetes Group of Meditronic, a multinational company with corporate headquarters in Dublin, Ireland, and an operational HQ in Minnesota, will integrate Nutrino’s technology that measures glycemic responses to food into its nutritional database. In September, Medtronic acquired another Israeli company, Mazor Robotics, for $1.6B.

Red Hat-NooBaa

American open source technology firm Red Hat has acquired NooBaa, a Tel Aviv-based data-storage specialist, for an undisclosed sum. Red Hat says the acquisition reinforces its position of leadership in open hybrid cloud technology.

Newater-AMS Technologies

Newater, a Chinese company, has acquired Israel’s AMS Technologies for a reported $13.5M. AMS. based in Or Yehuda, develops special membrane materials used in the treatment of waste water; Newwater manufacturers membrane filtration equipment and related hardware and engineered systems used in wastewater recycling.


Chinese primary and secondary education Tal Education Group has purchased Tel Aviv-based Codemonkey. According to China’s Inhua news agency, the purchase price was $20M. Codemonkey, founded in 2013, develops software games designed to teach children computer programming. The acquisition is the first by a Chinese company in Israeli educational technology.

Teldor Sale Eyed

Tene Investment Funds and Kibbutz Ein Dor are negotiating with Corning of the U.S. on the possible sale of Teldor Cables & Systems, a manufacturer of cables and wires for telecommunications, electricity and electronics. About a decade ago, the private equity firm purchased half of Teldor, based in Ein Dor, a kibbutz in the Upper Galilee, at a company value of $46M.


Science & High Technology

Ford Decision Systems

Ford is developing decision-making systems for autonomous automobiles in Israel, according to a report in Globes. The systems, which are essential to the operation of driverless cars, will be developed at SAIPS, the Rehovot-based specialist in machine learning acquired by the U.S. automaker two years ago. SAIPS developments include a visual cognitive system for identifying pedestrians and vehicles in difficult weather and lighting conditions and a core system enabling automatic drawing of a high-resolution 3D map of cities in which the car drives itself.

Personalized Organs

Researchers at Tel Aviv University say that they are developing the world’s first personalized tissue implants that can be created from the patient’s own cells and tissue. According to a report on the Israel21C website, the technology makes it possible to engineer any tissue implant, or the spinal cord, the heart or brain, from one small bit of fatty tissue. Such implants, the scientific team notes, minimizes risks from current implants, in which the patient’s immune system must be repressed to prevent rejection.

Lab-Grown Steak

Aleph Farms, an Israeli company developing edible beef created in a laboratory rather than from live animals, has unveiled what it says is the world’s first lab-grown steak. Yediot Aharonot newspaper reported that the company says it can reproduce different types of beef cells, such as muscle, fat, and blood vessel cells, creating a structure that closely resembles that of a conventional cut of meat. Aleph Farms was founded in 2017 as part of The Kitchen, a food-tech incubator backed by Israel’s Strauss Group food producer and the Technion Institute of Technology in Haifa.

Lonza’s Haifa Center

Lonza, the Swiss life sciences company, opened its Israeli Collaborative Innovation Center (CIC) in Haifa’s new Life Science Park in late November. The Basel-based multinational plans to concentrate on expression systems and synthetic biology, gene therapy and data acquisition and analytics.

Fighting Food Waste

Wasteless, a start-up aspires to reduce food waste, improve the supermarket shopping experience and increase retailer profits with a new artificial intelligence system that adjusts prices as the expiration date of food products approaches. Using the technology, for example, the price of a carton of cottage cheese will be reduced over time. Founded in 2017, Wasteless has offices in Tel Aviv, Amsterdam and New York.

Cannabis Investment

Merchavia Holdings, an Israeli high-tech investment firm, has signed a memorandum of understanding for its first investment in the medical cannabis sector – $400,000 in an unnamed Israeli company developing a breakthrough technology for the consumption of medical cannabis oil in precise dosages, without heating, a process which protects the full medical properties.

Teva’s Generic EpiPen

Israel’s Teva Pharmaceutical Industries has begun marketing its FDA-approved generic version of EpiPen for the treatment of life threatening allergies. EpiPen is the flagship branded drug of Mylan, Teva’s generic pharmaceutical rival, which acquired it from Merck in 2007. Two years ago, EpiPen was the subject of sharp protests over hikes in its price, resulting in a $465M compromise agreement with the U.S. Government Medicaid insurance program.

Skoda Connections

Skoda is expanding its Israeli connections. In late November, the Czech automaker said it was collaborating with three Israeli start-ups, Chakratec, a specialist in power charging and storage solutions based in Lod not far from Ben-Gurion International Airport, UVeye, a Tel Aviv developer of inspection technology, and Anagog of Tel Aviv, which develops artificial intelligence technology that tracks drivers and predicts their needs based on data from their mobile phones.

Chinese Partnership

Exsun, a Chinese GPS specialist, has partnered with Israel’s EyeSight Technologies on development of driver monitoring systems for commercial trucks. The move comes in the wake of new regulations in Shenzhen, where Exsun is based, requiring all heavy trucks to have driver monitoring systems by June 2019. Eyesight’s driver monitoring technology, which tracks the driver’s gaze direction, pupil dilation, and head position, will be integrated into Exsun’s truck fleet management tools.

Shenzhen Center

Tel Aviv University and the Tsinghua Berkeley Shenzhen Institute (TBSI) unveiled their new center for collaborative research in the Chinese city in early December. The new center, part of a continuing venture with the Morningside Group of Hong Kong, is designed to serve as a gateway for start-ups coming out of Ramot, TAU’s technology transfer company, and for start-ups funded by Tel Aviv University’s early-stage venture capital fund.

Parking Solution?

Two Israeli entrepreneurs say they are developing a small electric-powered vehicle that can be folded with the push of a button to a width of just 1 meter, about the width of a motorcycle. According to a report in Calcalist, the economic supplement of Yediot Aharonot, engineer Asaf Formoza and nanophysicist Udi Meridor’s company, City Transformer, are working on a vehicle that will be capable of speeds of up to 90 kph when unfolded, and small enough so that five of them can fit into one traditional-size automobile parking space. A pilot project is planned for Tel Aviv next year, according to the report.

Teaming with Time

Time Magazine has again partnered with Apester, a Tel Aviv-based content start-up, for its annual Person of the Year survey. It’s the third time that the magazine has utilized the interactive story format of Apester for the annual survey. Time readers chose between 55 candidates. Apester’s content is embedded in approximately 1,500 news sites, including CNN and Variety.

Ceva Contracts

Ceva, a developer of low-energy platforms for audio, communications and connectivity with offices in Herzliya and Mountain View, California, has won two new contracts for its Bluetooth-based technology. The contracts are with an American firm, Atmosic, for a series of its chips, and with Sonova Holding of Switzerland, one of the world’s leading suppliers of hearing solutions including hearing instruments, cochlear implants and wireless solutions.

Amdocs In India

40% of the almost 25,000 employees of Amdocs, the Israeli-American global leader in software services for media and telecommunications companies, are located in India. According to its annual report for the fiscal year, which ends in September, the multinational, with a current market cap of about $9.5B, has 4,600 employees in Israel, 4,300 in the U.S. and almost 10,000 in India.

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