Israeli defense contractor Elbit Systems said on Sunday it completed a $500 million deal to buy state-owned rival IMI Systems after receiving government approval for the privatization of IMI last week. Elbit paid $495 million for IMI, with an additional payment of $27 million contingent on IMI meeting agreed performance goals. Formerly known as Israel Military Industries, IMI Systems focuses on the development and production of combat-proven solutions and technologies used by the land, air, naval, cyber and homeland security forces.
As part of the deal, some of IMI’s operations will be moved, paving the way for more than 30,000 housing units to be built.The government announced in 2013 its intention to privatize IMI, a manufacturer of military systems best known for being an early maker of the Uzi submachine gun. Elbit was the last remaining bidder among five that had shown interest.
In June, the acquisition agreement between Elbit Systems and the government received approval from the committee for the tender of the sale of state shares and by the board of directors of the company. The transaction has been completed following the signing of the relevant documents and the receipt of the remaining applicable governmental approvals, as well as approval of the head of the Israeli Antitrust Authority.
According to IMI’s privatization agreement, Elbit Systems will receive the knowledge required to produce light rocket propulsion systems, among other things, but the activity relating to this will remain in the hand of government defense company Tomer Systems, which was founded as part of the privatization of IMI so that the state would be able to preserve sensitive strategic infrastructure relating to TASE, such as rocket propulsion.