After completing several weeks of staff work, it appears that the Ministry of Finance and Ministry of Defense plan to merge Israel Military Industries Ltd. (IMI) with Rafael Advanced Defense Systems Ltd.. Officials from the two ministries worked together with the Histadrut (General Federation of Labor in Israel) on the plan.
The teams examined various aspects of a merger of IMI with one of the two government defense companies, Rafael and Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1). Both companies expressed interest in acquiring IMI, and both companies told the work teams of the considerable synergy between their activities and the activities of IMI.
Sources said today that the Ministry of Finance and Ministry of Defense intend to announce their decision in a few days. The longstanding plan to privatize IMI will be dropped, and the company will be merged with Rafael, which is considered a profitable and financially sound company.
In recent weeks, Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) has also expressed strong interest in acquiring IMI.
Over the next two days, the Ministry of Finance is scheduled to hold a preparation meeting ahead of an official announcement of the decision about the IMI merger.
Published by Globes [online], Israel business news - www.globes-online.com - on January 17, 2011
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