Some 25 years ago, Israeli businessman Michael (Mikey) Federmann, a veteran hotelier and the son of one of the founders of the Dan Hotel chain, entered a field that was entirely new to him: the defense industry. This happened almost by chance, after a company he had acquired - El-Op - merged with Elbit Systems Ltd. (Nasdaq: ESLT; TASE:ESLT) through a share swap. Today, following a series of acquisitions and due to the wars in Ukraine and Israel, Elbit has become Israel’s biggest defense company. Federmann has been transformed from a hotelier whose holdings were valued at a few billion shekels into an industrialist with the largest fortune in the Tel Aviv Stock Exchange (TASE), holding assets worth more than NIS 35 billion. He is one of the three wealthiest Israelis in the world, alongside Eyal and Idan Ofer.
In that first merger deal, the Federmann family received 32.5% of the shares of the merged company, and Mikey Federmann was appointed chairman. He later acquired an additional 20% of Elbit shares, which subsequently acquired Elissra Tadiran Communications. Subsequently, Federmann purchased an additional 5.5% of the shares. After several further deals by Elbit, including the acquisition of Israel Military Industries (IMI), and the geopolitical upheavals of the past three years, Elbit Systems became Israel’s leading defense company in terms of revenue, profit, and number of employees.
Despite this, Federmann (83), who holds nearly half of Israel’s fourth most valuable company, and whose share price has jumped by around 200% over the past three years, is not widely known to the public. Throughout the decades in which he has been a leading player in Israel’s business arena, among other things due to the family’s ownership of the Dan Hotels chain, he has maintained a low profile and diligently avoided the media. So, who is the mysterious tycoon who, within just a few years, has become one of the few double-digit Israeli billionaires?
"He’s not one of those people they call ‘tycoons.’ I don’t like the word ‘tycoon’ when it comes to people like him," says a veteran industrialist. "The claim that he made a great deal of money is true, but he’s a mensch. He belongs to a group of people who don’t take from the public; on the contrary, they give to the public and to the state, even if quietly. He’s a true Zionist. Unlike other Israeli billionaires, all his businesses are here in Israel, providing jobs and paying enormous taxes. He also donates money constantly, for establishing departments at hospitals and for educational purposes, and no one hears him boasting about it."
"It’s very hard to find someone who achieves phenomenal business success and remains grounded. He’s the salt of the earth," says another person close to Federmann. "He is deeply connected to his family, and the entire family runs the businesses together, with everyone having a role in their companies. He is deeply connected to the State of Israel, which is why he kept the businesses here. There is no showiness or ostentation about him, and he doesn’t flaunt his wealth. He knows how to enjoy his money, with expensive vacations and the like, but you’ll never hear him brag about it."
NIS 35 billion in family fortune
Mikey Federmann was born in 1943 in Haifa to Bella and Yekutiel Federmann. The roots of the family’s wealth were planted about a year before the establishment of the State of Israel, in June 1947, when brothers Yekutiel and Shmuel Federmann purchased the Kaete Dan Pension, a small 21-room guesthouse on the Tel Aviv seashore, which became the cornerstone of the Dan Hotel chain. Today, the chain comprises 17 luxury hotels in Israel and a business hotel in Bangalore, India, and is traded on the Tel Aviv Stock Exchange at a market cap of approximately NIS 4 billion. The father, Yekutiel, was also involved in industry, real estate, technology, and finance, but the hotel chain was the family’s main business.
Federmann served in the IDF’s elite special reconnaissance unit Sayeret Matkal. After paratrooper basic training, he completed the unit’s combat training track as well as training as a squad commander in a team commanded by Ehud Barak. During his service, he also met Benjamin Netanyahu. While his relationship with Netanyahu has remained on the back-burner, Barak and Federmann have maintained a close relationship over the years. Federmann has contributed to Barak’s political campaigns and to his civilian initiatives, including millions of dollars to the Federmann Cyber Security Center at the School of Engineering and Computer Science at the Hebrew University of Jerusalem. Barak, when serving as Minister of Defense, approved millions of dollars in contracts between Elbit and the state.
In 1989, brothers Yekutiel and Shmuel transferred overall responsibility for managing the Dan Hotel chain to the second generation. Mikey Federmann was appointed chairman, a role previously held by his father, and Ami Federmann, Shmuel’s son, was appointed vice chairman, a role previously held by his father and which he still holds today.
The hotel chain has provided the family with capital over the years, but today, the second business pillar on which the Federmann family stands is far more profitable. The family controls Elbit Systems through a private company called Federmann Enterprises, owned by Mikey Federmann and his children David, Gideon, and Daniel; his sister Irit; his cousin Ami and his children; and their mother, Ruth Federmann. Taken together, the shares in the two holdings, Dan Hotels and Elbit, are worth roughly NIS 35 billion.
In Dan Hotels, which is traded at a valuation of nearly NIS 4 billion, Federmann Enterprises holds 87% of the share capital, a stake worth about NIS 2.8 billion on the TASE. Dan Hotels is managed by Shlomo Tahan, and its chairman is Gideon Federmann, the middle son of Mikey and Liora Federmann.
Federmann Enterprises also controls (42%) Elbit Systems. The family company’s stake is currently valued at NIS 32 billion, roughly eleven times the value of its stake in Dan Hotels. The gap has widened dramatically over the past five years, after Elbit’s share price surged by 320%, while Dan Hotels stock rose by only 23%.
Elbit Systems, managed by CEO Bezhalel Machlis, is an international defense company that, in recent years, has been posting new records every quarter, amid an arms buildup by many countries that need its products. Elbit manufactures a very broad range of complex defense systems. It sells to the aviation and security sectors, including aerial, land, and electro-optical systems; electronic warfare systems; communications equipment for soldiers (helmets, smart glasses, light armor); unmanned armored vehicles (such as AvantGuard); weapons systems; modules for aviation and armored vehicles, and more.
Three years ago, on turning 80, Federmann retired from his roles as chairman of Dan Hotels and chairman of Elbit, handing over the reins to his children: David, the eldest, serves as chairman of Elbit; Gideon, the middle son, is chairman of Dan Hotels; and Daniel, the youngest, is responsible for special projects within the Federmann Group. His wife, Liora, also retired a few years ago from her role overseeing design for the hotel chain, passing the baton to Roni, David’s wife, an architect.
"Their businesses are enormous and the companies are publicly traded, but it feels like a family business," says a former Dan Hotels senior executive. "All the members of the Federmann family are part of the businesses and contribute to them. Everyone is grounded. Success and money has never gone to their heads."
Twenty years ago, Federmann became embroiled in a highly publicized power struggle that could have wrested Elbit from him, when Hezi Hermoni, then-CEO of Tadiran Communications, announced his intention to take over Elbit. Federmann emerged victorious with Elbit ultimately taking over Tadiran as part of a three-way defense merger between Elbit, Tadiran, and Elissra. The deal earned Federmann the title "King of the Defense Industries" in Israel.
In a rare media interview with "Globes" after that battle, Federmann said: "I feel that we did the right thing for Tadiran, for Elbit, and for Elissra - and maybe it sounds too Zionist, but also for the State of Israel. After all, what are we living for? Not just to make money. Contributing to Israel is extremely important to us, absolutely. One phone call from the Chief of Staff to Yossi or to me is worth more than another penny or another percentage point in profit."
While the Federmanns flew under the media radar for years, Federmann’s son Daniel entered the gossip columns when he married Sharona Pick in 2011, daughter of famed singer and composer Zvika Pick. Their modest wedding, held at the family home, was attended by numerous prominent figures, including then-President Shimon Peres, and others. Seven years later, Sharona’s sister, Daniela, married Hollywood director Quentin Tarantino.
Defense industry money
Elbit’s third-quarter results, published last month, showed that its order backlog grew by $1.4 billion during the quarter, reaching a new record of $25.2 billion at the quarter’s end. This backlog does not yet include the largest deal in the company’s history: a massive and mysterious $2.3 billion contract reported in mid-November. Elbit has not disclosed details or the identity of the customer, which is procuring what is described as a "strategic" system. According to reports, the customer is the UAE. Elbit did state that the deal would be spread over eight years. Following the announcement, many questions arose, including the meaning of the term "strategic" in the context of the capabilities being sold. It should be noted that every deal is subject to approval by the Ministry of Defense, but details remain very sparse.
Even before the enigmatic contract that sparked great investor curiosity, the company, which is traded both on the TASE and Nasdaq, posted strong third-quarter results. Year-on-year revenue grew by 11.9% to more than $1.9 billion, slightly below analysts’ forecasts. Net profit increased by 68.6% to $133 million (and almost $160 million on a non-GAAP basis). Net profit per share reached $3.35 for the quarter, significantly above analysts’ expectations. Non-GAAP operating profit was approximately $187 million, a profit margin of 9.7%, close to the 10% target Elbit set for the coming years.
Dan Hotels, by contrast, closed the first nine months of the year with revenue of NIS 1.1 billion, similar to the same period in 2024. The stagnation in revenue stemmed in part from the fact that evacuees from the war were no longer staying in the hotels, while inbound tourism has yet to recover. The company posted a loss of NIS 18 million, compared with a net profit of NIS 51 million in the first nine months of last year.
Management explained that "the war has had a materially negative impact on inbound tourism to Israel in 2025, and in Dan Hotels’ assessment, this is expected to continue to negatively affect the company’s operating results this year as well." In addition, the Mary’s Well Hotel (Ma’ayan Hotel) in Nazareth and the Dan Boutique Hotel in Jerusalem remain closed but are expected to reopen during the first half of 2026. In October, the chain purchased a hotel in New York City, the NoMo SoHo, an unusual move for its portfolio, which is primarily based on hotels in Israel, including the King David Hotel in Jerusalem and other Dan Hotels across the country.
A heart in hospitality
Although it is clear where the family’s significant wealth comes from today, those close to Federmann testify that his heart, and that of the entire family, lies in hospitality. "The big money and the focus are at Elbit, in the defense industry, but Mikey Federmann’s heart, and that of the whole family, is in hospitality. They are deeply connected to their hotel business. Dan Hotels was the family’s foundation, which enabled them to invest in another company, through which they acquired their stake in Elbit, and the chain is, for them, part of the family," says a former Dan Hotels senior executive.
That executive recounts that Federmann was involved in the chain’s affairs down to the smallest details. "He knew everyone and spoke regularly with all the major hotel general managers: the King David, Dan Eilat, Dan Carmel, the Accadia in Herzliya. He had a direct line to them, but he never made a chain’s general managers feel that he was going over their head or interfering with their management. He was interested in the foreign delegations coming to Israel and wanted to be involved in the details."
A Dan Hotel legend has it that one day, during a visit to one of the hotels, Federmann happened to hear about a long-time junior employee who had been diagnosed with cancer and immediately arranged an appointment with a leading specialist and paid all the medical bills. "It’s not apocryphal and it happened more than once," says a person close to Federmann. "That’s the man. He’s always taken care of his chain’s staff. There are countless stories of his behind-the-scenes help. When he hears about an employee who has been diagnosed or is ill, he connects them with the right doctors and pays the bills without telling anyone. He's always treated his employees as if they were his family."
Other senior figures recount that Federmann is a people person who is deeply connected to employees. "He is extremely loyal to his people. If a CEO wanted to replace someone who had been with the chain for 30 years because it was time for change, he would always say, ‘Think about it again, and think twice and three times.’ Not ‘think about the business,’ but about the person. He was also often very emotional in meetings with employees. When we held holiday gatherings, he would speak with such feeling that we sometimes thought he was about to shed a tear. The feeling he conveyed was that the employees are family."
A former Elbit Systems senior executive says that, unlike his close involvement in the hotel business, Federmann’s enormous success at Elbit stemmed mainly from a rational decision: to leave Elbit in the hands of its professional managers. "Mikey Federmann came from the hospitality sector. His great business achievement was allowing Elbit’s long-time CEO, Yossi Ackerman (who served from 1996 to 2013), to lead the business."
The executive recounts that in the 1990s, Federmann strongly opposed acquiring new companies and activities for Elbit. "You could say that Mikey did not believe in acquiring other entities, such as the acquisition of Elissra from the Koor conglomerate. After Ackerman was appointed CEO, he essentially forced Mikey to allow him to pursue systematic acquisitions, effectively buying what the government privatized. That’s how, in 2018 (during Machlis’s tenure as CEO), they bought IMI for next to nothing and turned it into something massive today."
According to that former executive, "Mikey is a quiet owner who does not interfere in the main areas of the business. Unlike many other so-called tycoons in the economy, who make themselves known in the boardroom and sometimes outside the company as well. Mikey didn’t involve himself much in day-to-day management. Elbit grew according to Ackerman’s decisions: competing with the government defense industries and executing large acquisitions. That drove its growth, its big moves in acquiring companies and activities, and then the breakthrough in global sales."
A scholar and a yekke
Those close to Federmann say he has always favored a conservative business approach, a "you don’t have to grow too much" attitude. "That’s especially true in hospitality. He didn’t like taking unnecessary risks or growing excessively," says a former senior executive at Dan Hotels.
But the backing he gave his managers and his support for the acquisitions they initiated has proven itself over the years. "To his credit, once Ackerman decided on acquisition moves, Mikey gave him full backing," says the former Elbit executive. "I think Mikey opposed acquisitions because he came from a completely different industry. Essentially, Mikey knew about selling hotel rooms to tourists in Israel, not about selling sophisticated weapons systems to armies around the world."
A veteran industrialist adds that Federmann elected to be a quiet owner in order to give his managers the space and managerial credit they deserved. "First and foremost, he gave his CEOs room. Despite his role and everything else, if I needed something related to Elbit, the conversation with Mikey was always pleasant but in the end he would always refer me to Elbit CEO Bezhalel (Butzi) Machlis). For several years now, there’s been a sense that he intervenes less, and that Butzi runs things with a firm hand.
"He also always gave the impression that, in terms of passion, he invested far more in the hotel business than in Elbit. It’s clear that Elbit is a golden goose and an excellent company that underpins the family’s new wealth today, but it always seemed that what truly interested him more was hospitality. Elbit is Butzi’s kingdom, with backing from Mikey and his son David. Mikey doesn’t put himself front and center unless there’s a need."
At the same time, colleagues caution that it is easy to misjudge Federmann. "He comes across as a kind, pleasant grandfather type, and he really is someone everyone enjoys having around, but in business he knew exactly where he wanted to go and was never showed weakness in the face of business challenges. He has a highly developed business sense and is extremely sharp."
The former Elbit executive adds: "Mikey is a ‘yekke’ by nature (German Jew), a controlling shareholder who likes precise and ongoing reports. He’s also someone who values respect. Heaven forbid that something problematic be written about him in the newspaper - we got the impression that could set off World War Three."
"He has a trait common to many industrialists, which is being almost modest," says the well-known industrialist. "There are many people in industry sitting on tens of millions and more who don’t make a fuss. You arrive at his very luxurious offices near the Dan Hotel, with a beautiful view of the sea, and everything around you indicates wealth, but the man himself speaks to you at eye level, as with everyone. He is very open, very knowledgeable, no pretense - what you see is what you get. But make no mistake. Don’t think he’s weak just because he is a pleasant person. He’s one of the strongest, sharpest people in the market."
Published by Globes, Israel business news - en.globes.co.il - on December 22, 2025.
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