“Israel” Prepares Defense Industry Stake Sale

By Staff, Agencies

“Israel” plans to sell stakes in its top arms manufacturers to boost revenue and ease the financial strain from two years of intensified conflict, officials say.

Yali Rothenberg, accountant general at the Finance Ministry, told the Financial Times [FT] that preparations were underway to partially privatize "Israel" Aerospace Industries [IAI], the state-owned company known for producing the Arrow missile system, drones, and missiles.

The occupation entity is also exploring options to privatize Rafael Advanced Defense Systems, the manufacturer behind the Iron Dome and "David’s Sling" air defense systems, though officials noted this process would be more complex.

"The additional resources required for defense" have prompted the entity to consider "the partial privatization of certain defense-related assets," Rothenberg said, adding that the discussions point to selling a 25% stake in IAI, with a possible upper limit of 49%, subject to "Israel's" approval.

Gil Pinchas, former chief financial advisor to the military and so-called security ministry, estimated an initial sale of 20–25% of IAI could occur "within a year or two."

The push to privatize comes amid record military expenditures. The Finance Ministry estimates the direct cost of the war, which "Israel" began after Operation Al-Aqsa Flood, at $62 billion, excluding wider economic consequences.

In 2024, "Israel’s" security budget surged to 8.3% of GDP, doubling from two years prior, as the military launched aggressions on at least seven fronts, including Gaza, Lebanon, Syria, and Iran.

Despite ceasefires, “Israel” is set to spend $35 billion on security, keeping the budget at 5% of GDP, while deficits and slow growth persist

Since October 2023, the US has given “Israel” $21.7 billion in aid, while its security exports hit a record $14.8 billion in 2024, with IAI posting $6.1 billion in sales and $493 million in profit.

"Israel’s" arms firms posted strong gains, with IAI and Rafael reporting record profits, while officials explore privatization and relocating military operations to cut costs.

Moreover, "Israel" plans to monetize prime military real estate and sell IAI shares to ease defense costs, with finance and security ministries aligned on structural reform.