- Israel plans to list state-owned defence firms IAI and Rafael in the US to ease disclosure rules
- Israeli officials and company reps will visit the US in mid-July to discuss potential IPOs
- The listing could be primary or dual, with stakes of up to 30% expected to be sold by year-end
Israel is exploring listing state-owned defence manufacturers Israel Aerospace Industries Ltd. (IAI) and Rafael Advanced Defense Systems Ltd. in the United States, a move that could help the companies sidestep tighter disclosure requirements at home, according to reports.
Representatives from the Israeli government and the two firms, which make the Arrow and Iron Dome missile defence systems, are scheduled to travel to the US in mid-July to explore a possible overseas initial public offering, Bloomberg reported, citing an Israeli official familiar with the matter.
The move could take the form of either a primary or dual listing, the official told Bloomberg, declining to be named as the plans are private.
Bloomberg had previously reported that Israel is planning to sell stakes of up to 30% in both companies, aiming to complete the process by the end of the year. IAI's valuation is pegged at around 100 billion shekels ($33.7 billion) and Rafael's at about 60 billion shekels.
The delegation will be led by senior officials from Israel's Government Companies Authority, along with representatives from the defence and finance ministries, IAI and Rafael. They are expected to hold discussions with investors, underwriters, lawyers and regulators on how US transparency norms would apply to firms handling classified projects, according to the report.
American regulators are widely seen as more willing than their Israeli counterparts to grant disclosure exemptions on national security grounds, it said, adding that no final call had been made on the timing or venue of the stake sale.
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The report stated that the privatisation push comes as Israel's defence sector has scaled up sharply since October 2023, with rising military expenditure projected to push this year's fiscal deficit to 5.3% of GDP. The report added that authorities are also considering easing restrictions on executive pay and faster approvals to help the firms compete globally.
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