The Elbit defense contractor completed the purchase of the previously state-owned Israel Military Industries weapons manufacturer Sunday in a deal potentially worth upwards of NIS 1.8 billion ($495 million), officials said.
The sale, first announced in March, went through this week after the Finance Ministry finished the process of allowing the once government-controlled company to privatize.
The move was praised by Israeli government officials, who claimed it was a positive step for both the country’s defense industry and for its real estate, as Elbit was expected to sell off IMI’s facilities in Ramat HaSharon and Tirat HaCarmel and move to the Negev desert, freeing up space for housing in those popular areas in central Israel.
“The sale of Elbit will allow the advancement of the Israeli defense industry, will elevate Israel’s technological capabilities and will increase defense exports. All of this will directly benefit Israel’s economy,” Prime Minister and Defense Minister Benjamin Netanyahu said Sunday.
IMI, referred to in Hebrew by its acronym Ta’as, is the maker of iconic Israeli infantry firearms like the Uzi, the Galil assault rifle and the Negev machine gun, as well as much of the IDF ground forces’ ammunition, multiple types of rockets for air and artillery systems, and precision ordnance.
According to Elbit, it has already paid NIS 1.8 billion to purchase the company from the Israeli government and will pay an additional NIS 100 million ($27 million) if IMI hits certain benchmarks in the future.
According to the Finance Ministry, the sale of IMI’s real estate holdings will allow for the creation of “thousands of housing units in the heart of in-demand areas and the establishment of factories in the Ramat Beka complex in the Negev, which will advance the employment and development of that area.”
Finance Minister Moshe Kahlon lauded the government for privatizing IMI after “many years” of discussions on the issue.
“The State of Israel and the citizens of Israel will all benefit from this process in the coming years,” he said.
The director-general of the Defense Ministry, Udi Adam, said steps were taken to ensure that classified military information that was held by IMI remained secure despite its absorption into a privately held company.
According to the business daily The Marker, negotiations were led on the government’s side by Finance Ministry Accountant General Roni Hizkiyahu, as well as officials from the Government Corporations Authority, the Finance Ministry’s Budgets Department, the Defense Ministry, and the Israel Lands Authority.
The privatization of IMI was first approved by the cabinet in 2013. Elbit won the government’s tender process for the purchase.
Times of Israel staff contributed to this report.