Israel’s Bet Shemesh Engines inks $1.2b deal to produce parts for global aviation giant

Bet Shemesh Engines, which makes parts for engines used in Israeli fighter jets, has secured a $1.2 billion contract for the supply of critical jet engine components to one of the world’s leading aircraft engine manufacturers, the company said Sunday.

Bet Shemesh Engines did not specify the name of the manufacturer but said that the contract marked the largest agreement in the firm’s history.

Founded in 1968, Bet Shemesh Engines designs, develops, and manufactures parts and components for jet engines, including castings of blades, forging of disks, and machining of rotating parts. Based around the city of Beit Shemesh, outside Jerusalem, the firm also develops and manufactures small jet engines for unmanned aircraft systems.

“The strategic deal strengthens our position as a leading forging manufacturer and supplier to the global aviation market,” the firm said in a filing to the Tel Aviv Stock Exchange.

The 15-year contract is an extension of a previous agreement signed with the same strategic customer. The new contract has an option to extend the agreement by five years and increase the deal value by $400 million. The agreement also includes the development and manufacturing of additional parts for new engine programs led by the global engine manufacturer.

With the new agreement, Tel Aviv Stock Exchange-listed Bet Shemesh Engines has increased the value of its framework agreements, from $2.1 billion to $3.3 billion, the firm said.

The renewal comes as European countries have ramped up pressure on Israel over fighting against Hamas in Gaza, warning of sanctions and downgraded trade ties alongside arms embargoes already going into effect.

Over the summer, Norway’s $2 trillion sovereign wealth fund, the world’s largest, confirmed that it divested its 2% stake in Bet Shemesh Engines, which provides services to Israel’s armed forces, including the maintenance of fighter jets.

The divestment was part of an ongoing review of investments in Israeli companies over the worsening humanitarian situation in Gaza and the West Bank.

Bet Shemesh Engines, controlled by Israeli private equity firm FIMI Opportunity Funds, also provides services for the maintenance, repair, overhaul, and assembly of civilian and military jet engines. Among its customers are Israel’s Defense Ministry, Pratt & Whitney, Siemens, and GE Aviation.

Reuters contributed to this report.