News Analysis – April 2019

General News Summary

Bibi’s Fifth Term

Benjamin (Bibi) Netanyahu scored a convincing victory in Israel’s parliamentary elections on April 9. The prime minister’s Likud won 36 seats in the 120-member Knesset, the largest number ever for the ruling party under Netanyahu’s leadership. More significantly, the 65 seats won by the center-right bloc seem to guarantee Bibi a fifth term as prime minister.

In winning the prime ministership for the fifth time, Netanyahu turned back a strong challenge from Blue White, a new centrist coalition of parties headed by former IDF chief of staff Benny Gantz and including two other former heads of the Israeli army: Moshe (Bogie) Ya’alon and Gabi Ashkenazi. The troika of ex-generals, joined by veteran politician Yair Lapid’s Yesh Atid party, won 35 seats, only one less than the 36 collected by Netanyahu’s Likud. The numbers though are deceptive – all the Likud and the right-of-center parties it calls its “natural partners”, who passed the 3.25% threshold and thus won seats in the Knesset, accounted for just over 54% of the popular vote. The center-right numbers are substantially larger. New Right and Zehut, the two largest parties shut out of the Knesset because they didn’t pass the threshold, are both substantially right of center and together accounted for almost 6% of the all votes cast.

Some election take-aways:

Voters did not seem concerned about criminal records, or criminal accusations against successful politicians. In addition to massive support for Netanyahu, election winners included Aryeh Deri, head of the Shas party with 8 Knesset seats, who had served 22 months in prison for accepting bribes, and Avigdor Lieberman, the former defense and foreign minister, who has been elected several times after a series of charges for breach of trust and other offenses were dropped less than a decade ago (his Yisrael Beitenu party won 5 Knesset seats on April 9).

The New Right of Naftali Bennett and Ayelet Shaked, fell just short of the 3.25% threshold for entry into the Knesset. Bennett and Shaked, respectively the education and justice ministers in Netanyahu’s outgoing government, broke away from the Jewish Home party about three months before the election.

The Zehut list, led by right-wing activist Moshe Feiglin, failed to pass the 3.25% threshold for representation in the Knesset after strong showings in pre-election polls of 6 seats. Active in Israeli politics since the 1990s, Feiglin has been largely unsuccessful in attempts to gain political power, first as head of the Zu Artzeinu protest against the 1993 Oslo Agreements; then in an unsuccessful try at a foothold in the Likud party leadership, and finally in the 2019 elections on a platform advocating personal liberty, legalization of cannabis and the truly explosive idea of building the Third Jewish Temple on Jerusalem’s Temple Mount, where Islam’s al-Aqsa  mosque and the Dome of the Rock now stand.

The decline of the Israeli left continued. Despite a change of leadership (or perhaps because of it), the center-left Israel Labor Party won only 6 seats, the fewest in the movement’s 71-year political history. Meretz, which is farther left, collected only 5 Knesset seats.

Moon Landing – Almost

Israel came up just short of becoming the fourth nation to land a spacecraft on the surface of the Moon on April 11. After negotiating the long journey from Earth, establishing a lunar orbit and descent to within a few kilometers of the Moon’s surface, engine failure in the landing mode caused Beresheet, the Israeli spacecraft, to crash onto the surface of the Sea of Tranquility. Beresheet, developed by the private SpaceIL firm and Israel Aerospace Industries at a shoestring-for-the-mission cost of only $100M, did succeed in taking a “selfie” with the lunar surface background from an altitude of about 22 km.

Had the soft landing gone as planned, Israel would have been the fourth country, after the U.S., the former Soviet Union and China and the first non-governmental body to land its spacecraft on the Moon. Financing for the Beresheet project, which started out as an entrant in the since-dropped Google Lunar XPrize competition to land a privately financed robotic vehicle on the Moon, came from donors including Morris Kahn, the South African-born Israeli entrepreneur and founder of Amdocs, the communications and management software giant.

Days after the failure, Kahn announced that he was already seeking potential donors to join him in Beresheet 2, a second attempt to land an Israeli spacecraft on the Moon.

Bamba to America

Osem, the Israeli food manufacturer, is seeking to export Bamba, its peanut-flavored puffed-corn snack that’s been a favorite of Israeli kids for decades, to the U.S. Talks about a distribution agreement are under way with Nestle of Switzerland (of which Osem is a wholly-owned subsidiary). Osem will double its production of the iconic snack when it opens a new NIS 200M Bamba-making plant in the southern Israeli city of Kiryat Gat.

21 Israelis on Forbes List

21 Israelis have been included in Forbes annual billionaire listing. Highest ranking went again to industrialist Eyal Ofer, 149th with an estimated worth of $9.3B. Stef Wertheimer, the founder of Iscar, was second among Israelis and 303rd on the list at $5.7B, followed by shipping heiress and Bank Hapoalim owner Shari Arison ($5B, 3rd in Israel, 355th on the world list). Forbes listed Roman Abramovich, who received Israeli citizenship last year, with $12B, he’s 107th on the Forbes list.

Chicago Flights

Israeli airline El Al has followed up the recent announcement of direct flights to Orlando by saying that it plans to open a direct route to Chicago next year. Flights will commence after delivery of more Boeing 787 Dreamliners. El Al has already received eight of the aircraft from Boeing.

Tel-Aviv Expensive

Tel Aviv has been listed among the world’s 10 most expensive cities in a survey published by the Intelligence Unit of Britain’s Economist magazine. First place for most expensive was shared by three cities: Hong Kong, Paris and Singapore. Zurich was fourth, and Osaka and Geneva shared fifth place. Tel Aviv was 10th, down from last year’s ninth place.

Top 10 World Hospital

The Sheba Medical Center in Tel Hashomer, just outside Tel Aviv, has been rated 10th among all world hospitals by Newsweek magazine. At the top of the list are two U.S. hospitals, Mayo Clinic in Minnesota and Cleveland Clinic in Ohio and Florida. Singapore General was third.

Power Ranking

Israel was ranked 8th in U.S. News and World Report magazine’s annual power rankings based on evaluations of 80 countries around the world. First on the list was the U.S., followed in order by Russia, China, Germany, UK, France and Japan. Israel’s 8th ranking immediately preceded those of Saudi Arabia, 9th, and South Korea, 10th. Iran was 13th.

Drought Ends

Official Israel Water Authority statistics published at the end of March indicate the end of a five-year drought. After the rainiest March since 2003, the level of Lake Kinneret was the highest in six years, at 211.86 meters below sea level, 306 centimeters below its maximum level. An additional rise in the Kinneret, which serves as Israel’s main natural water reservoir, was expected as streams fed by melting snows on Mt. Hermon and the Galilee mountains feed more water into the lake.

Tent City Ideal Dropped

Tel Aviv has dropped the idea of setting up a tent city to accommodate visitors to the 2019 Eurovision Song Contest, due to take place in mid-May. There were no bidders in the Tel Aviv Municipality tender for the projected campsite, which would have gone up in the city’s Yarkon Park.

Flipkart to Tel Aviv

Indian e-commerce giant Flipkart Internet Private is setting up an R&D center in Tel Aviv, according to a report in India’s Economic Times. The center will focus on cloud technology, data protection and cybersecurity. With HQ in Bangalore, last September, Flipkart purchased Upstream Commerce, an Israeli retail analytics specialist, for an estimated $40M. Last year, Walmart, the American retailing giant, purchased 77% of Flipkart for $16B.

Eviction Sought

Marina Tel Aviv Hotels has asked a Jerusalem District Court to order eviction of residents living in its Diplomat Hotel in southern Jerusalem, which has served as a government immigrant hostel since the 1990s. The building is due to be handed over to the U.S. next year, to become the new home of the U.S. embassy in Jerusalem.

Rail Car Purchase

The Finance Ministry has authorized Israel Railways to order 30-40 passenger railway cars from Bombardier of Canada. The cars will help ease the shortage of carriages created by the opening of the Jerusalem-Tel Aviv fast rail link last year.

Officers Named

Maj. Gen. Yoel Strick has been named head of the IDF’s Ground Forces Command in one of a series of appointments by Chief of Staff Lt. Gen. Amir Kochavi. Strick will be succeeded by Maj. Gen. Amir Baram as head of the Northern Command. Brig. Gen. Ghassan Elian, the IDF’s highest ranking Druse officer, will be the next Coordinator of Government Activities in the Territories. At the same time, Brig. Gen. Michel Yanko has been named head of the Manpower Branch Staff.

 

The Economy

“Good Position”

The Israeli economy is in a good position, though there are possible problems in the future, says Bank of Israel Governor Amir Yaron in his annual report issued in late March. Yaron, who recently took over as head of Israel’s central bank, noted that the economy’s growth rate was greater than that in other developed countries, and that real wages had grown. At the same time, the central banker was critical of government policy which pushed growth forward by expanding the government deficit.

Deficit Higher

Israel’s 2018 government budget deficit amounted to 3.1% of GDP, according to figures published by the Central Bureau of Statistics in early March. The figure, much higher than the 2.9% deficit announced by Finance Minister Moshe Kahlon in early January, was attributed partly to changes in accounting procedures. According to Globes, budget cuts required by the increased deficit were to be imposed only after the Knesset elections on May 9.

Growth Slows

Israel’s GDP grew by only 2.2% in the second half of 2018, according to Central Bureau of Statistics figures. Growth was 3.4% in the first half of 2018 and 3.43% in the second half of 2017. The figure means that per capita, GDP was negligible, since Israel’s population usually increases by about 2% each year.

Royalties Rise

Fees and royalties from natural gas, oil and minerals totaled NIS 878M in 2018, 9.3% more than in 2017, according to the Ministry of National Infrastructure, Energy, and Water Resources. Most of the revenues, NIS 858M, came from natural gas exports.

Meanwhile, Egypt has announced that another huge natural gas field has been found off its Mediterranean coast. The Nour field, announced by Eni, is said to contain over 5 times the gas of Israel’s Leviathan field.

Fitch’s Rating

Fitch Ratings has affirmed Israel’s A+ credit rating, citing the economy’s stability, the high growth rate, wage increases and low inflation rate. At the same time, analysts noted that Israel’s ratings would continue to be limited by political and security developments.

Central Bank’s Profit

The Bank of Israel has reported a profit of NIS 5.3B for 2018, compared to a NIS 800M loss in 2017. The profit was attributed to higher interest rates on the dollar and the rise in the shekel-dollar exchange rate.

Post-Brexit Deal Signed

Economy Minister Eli Cohen and UK Secretary of State for International Trade Liam Fox in late February signed a trade and cooperation agreement providing for continuity in trade relations between the two countries after Britain leaves the European Union. Britain is Israel’s largest European trading partner and its third largest worldwide, with mutual trade of about $11B in 2018.

Chinese Exports

Israeli exports of electronic components to China increased by 80% in 2018, according to a report in Yediot Aharonot Hebrew daily. Quoting Israeli Export Institute figures, the paper said $2.6B worth of electronic components were shipped from Israel to China during the year, most manufactured by only a few companies. One of the firms, Intel, manufactures components in Israel, then ships them to China for testing and assembly. At the same time, Israeli firms exported electronic components valued at $860M to the U.S.

Exxon-Mobil Offshore Interest

International energy giant Exxon Mobil is looking at options of exploration for oil and gas in Israeli territory and has acquired Israeli government tender documents on offshore exploration, according to reports in the Israeli and international media. The government opened a tender process for offshore exploration rights last November.

Delek Eyes Egyptian LNG Facility

Israel’s Delek Group is eyeing the possibility of acquiring a liquified natural gas processing facility in Egypt, according to a report by Bloomberg. Under consideration are Idku, from Royal Dutch Shell, or Damietta from Union Fenosa of Spain. Delek and its partner, Noble Energy, last year agreed to a $15B sale of gas from its offshore fields to Egypt’s Dolphinus. According to press reports, Delek is also considering expanding production from its Leviathan offshore field.

Artimedia Enters India Market

Artimedia, which was formed by Israeli content providers to compete with YouTube and Facebook online video in the local market, is expanding to India. Artimedia will provide video advertising solutions to the Internet and Internet TV networks of India’s Eros International, in a deal that could be worth $350M.

Former PMs into Cannabis Firms

Former prime minister Ehud Olmert joined Univo Pharmaceutical, a Tel Aviv-based developer and producer of cannabis-based medical products, as an adviser and shareholder in early April. Last September, another former PM, Ehud Barak, was named chairman of InterCure, another specialist in cannabis-based medical technology. Both companies operate under the framework of a wide-ranging reform in the regulation of medical cannabis passed by the government in January.

In another development, Evogene, an Israeli agrotech company, said it was opening a subsidiary dealing exclusively with the medical cannabis market. Evogene, itself a spin-off of biological computation specialist Compugen, has developed computational systems for analyzing big data to mine insights about plant genetics and function.

 

Finance & Investment

Teva “Not for Sale”

Teva is not for sale, according to Kare Schultz, CEO of the financially troubled Israeli pharmaceutical industry giant. Speaking to the press in Tel Aviv in late February, Schultz said that the company had consolidated to avoid bankruptcy, that it had no intention of entering the new cannabis-based pharmaceutical market and attributed continued drops in revenue, in part to a 50% drop in prices of generic drugs, which constitute a major part of Teva’s sales in the U.S.

VC Bonanza

Thirty new venture capital firms were founded in Israel in 2018, raising a total of $2.6B, according to a report released by the IVC research company together with the Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co. Tel Aviv law firm. The total raised, a record, was $1.1B higher than the $1.7B raised by 18 new VC firms in 2017.

Foreign-Owned Exporters

Nine of Israel’s 20 largest export companies have foreign ownership, according to a report in Calcalist, the business supplement of Yediot Aharonot. Five of the firms are owned by U.S. companies, two are European-owned, one is Chinese and one has Mexican owners. According to the newspaper, Teva Pharmaceutical Industries is the leading exporter, followed by government-owned Israel Aerospace Industries, Intel, Israel Chemicals, the Bazan Group (also known as Oil Refineries Ltd.) and Adama Ltd., a pesticides manufacturer, which is the product of a 2017 merger between Israel-based Adama Agricultural Solutions Ltd. and Hubei Sanonda of China.

Hapoalim Profits

Israel’s Bank Hapoalim reported profit of NIS 3.97B and 9.7% return on equity in its 2018 report, filed in mid-April 2019. From that sum, the bank deducted NIS 2.2B to cover possible results of U.S. authorities’ investigation of the bank’s possible role in helping customers avoid U.S. taxes.

HoneyBook Raises $28M

HoneyBook, an Israeli platform providing management services for small businesses and freelancers, has raised $28M in a financing round led by City Ventures, Citigroup‘s investment subsidiary. Founded in 2013, HoneyBook began as an event-management specialist, eventually adapting a platform originally designed for weddings and family celebrations to the needs of small businesses.

Intel Capital Expands

Intel Capital, which recently announced expansion of its Tel Aviv operations, has already invested $435M in 90 Israeli companies, including $180M in 14 firms last year. Partner Yair Shoham says the expansion reflects Intel’s faith in Israeli innovation and entrepreneurship.

 

Mergers & Acquisitions

Nvidia-Mellanox

Nvidia of the U.S. has purchased Mellanox, an Israeli producer of networking technology using Ethernet and InfiniBand technologies, for $6.9B in cash, the second largest acquisition of a technology company in Israeli history. (The largest was Intel‘s 2017 purchase of Jerusalem-based auto safety specialist Mobileye in 2017 for $15B.)

Santa Clara-based Nvidia produces graphics processing units for the gaming and automotive industries; Mellanox, whose home base is Yokneam near Haifa, maintains corporate offices in Sunnyvale, California.

Aeronautics Deal Signed

Government-owned Rafael Advanced Defense Technologies and Israeli businessman Avichai Stolero have signed a definitive agreement to purchase Aeronautics, the Israeli developer of unmanned aerial, electro-optical and communications systems. Rafael and Stolero, who bought control at a company value of NIS 850M, will have equal stakes in Aeronautics, based in Yavne, southeast of Tel Aviv. According to a report in Globes, Stolero, who recently increased his holdings to 30%, will be unable to block the acquisition deal.

Palo Alto-Demisto

Palo Alto Networks, the cybersecurity specialist based in Santa Clara, California, has purchased Israel’s Demisto for $560M. The Israeli firm, which has offices in Tel Aviv, Cupertino, California, the U.K. and Germany, develops automation and orchestration software, accelerating response time in dealing with security threats. About 25% of Demisto‘s 150 customers are on the Fortune 500 listing of large firms.

McDonald’s Dynamic Yield

McDonald’s, the international fast-food chain, has acquired Dynamic Yield, a Tel Aviv-based artificial intelligence (AI) specialist. Purchase price was not disclosed, but various media sources estimated it at about $300M. McDonald’s says it will utilize its new acquisitions decision-logic technology to enhance the customer experience, among other things adding suggestions of additional items based on what a customer has already ordered.

Stryker-OrthoSpace

Stryker, the British medical technology firm, has completed the acquisition of OrthoSpace, an Israeli developer of orthopedic devices based in Caesarea, about halfway between Tel Aviv and Haifa. The acquisition involves an immediate payment of $110M and future milestone payments of up to $110M more. OrthoSpace develops and commercializes simple-to-implant, biodegradable balloon systems for the orthopedic market, solutions designed to reduce pain and increase patients’ range of motion while preserving a patient’s bone and joint structures.

Google-Alooma

Google has acquired Alooma, an Israeli data-migrations specialist based in Tel Aviv. Purchase price was undisclosed, but media reports place it in the $150M range.

ID Systems-Pointer

ID Systems, a Hackensack, New Jersey-based developer of Internet of Things development technology, has acquired Pointer Telocations Ltd. for $140M in cash and shares. Pointer, based in Rosh Ha’ayin in the high-tech belt northeast of Tel Aviv, provides telematics and IoT systems for the automotive, insurance and cargo logistics industries.

Qlik-Attunity

Qlik, a developer of business intelligence and data utilization technology based in Radnor, Pennsylvania, has acquired bid data software services firm Attunity for $560M. Founded in 1988 by Israeli entrepreneur Shimon Alon, Attunity provides software for the management, sharing, and distribution of big data across enterprise platforms and cloud. Headquartered in Boston, Attunity has offices in in the U.S., Europe, and Asia Pacific.

Walmart-Aspectiva

U.S. retailing giant Walmart has purchased consumer data-analysis firm Aspectiva of Tel Aviv for an undisclosed sum estimated in the tens of millions of dollars. Aspectiva, whose technology analyzes shopper opinions, will join Store No. 8, the technology incubator established by Walmart in 2017.

Alibaba-InfintyAR

Alibaba, the Chinese e-commerce giant, has purchased InfinityAR for an undisclosed sum. Based in Ramat Gan just outside Tel Aviv, InfinityAR has developed an open platform for augmented reality on mobile apps. The two companies have been cooperating for the last three years.

eToro-Firmo

eToro Group, a Tel Aviv financial trading firm, has acquired Firmo Network of Copenhagen, a blocktrading specialist. Founded in 2007, eToro enables users to invest in a wide range of financial assets, including cryptocurrencies. Purchase price was not disclosed.

888 Buys Bingo Assets

888 Holdings, the Gibraltar-headquartered online gambling firm, has paid $23.5M for bingo assets of Jet Management Group Limited and Jet Media Ltd. Most of the employees of 888, which was founded by four Israeli entrepreneurs, work in Israel.

Outbrain-Ligatus

Outbrain, an Israeli-founded company which now has its HQ in New York, has purchased European advertising services company Ligatus from the German Gruner + Jahr publisher for an undisclosed sum. Founded in 2006 in Tel Aviv, Outbrain buys advertising space on publishers’ websites, which it uses to promote sponsored content. Outbrain’s content has appeared on websites including CNN, BBC, The Washington Post, The Guardian, and Spiegel Online. The company has offices in 15 cities worldwide.

Priority Software-Optimize

Priority Software, a developer of enterprise resource planning (ERP) software based in Rosh Ha’ayin, northeast of Tel Aviv, has acquired the Optimize Group of Belgium for an undisclosed sum. Optimize builds ERP for specific industries, including beverage, metals and professional service firms.

JFrog-Shippable

JFrog, the Tel Aviv-based DevOpps developer, has acquired Shippable of Seattle, Washington. Purchase price was not disclosed, but media sources estimated it in the $40-$50M range.

MinuteMedia – The Big Lead

MinuteMedia, a London-based sports media company, which was founded in Israel in 2011, has purchased The Big Lead from the Gannett newspaper chain for an undisclosed sum. MinuteMedia currently is the publisher of several international sports websites, some in partnership with Sports Illustrated, USA Today and MSN.

Delek Sells Phoenix Stake

Delek Group, controlled by Israeli billionaire Yitzhak Tshuva, has signed a memorandum of understanding for the sale of its 30% stake in Israel’s Phoenix insurance company for NIS 1.6B. Purchasers in the deal, pending regulatory approval, are Centerbridge Partners of New York and Gallatin Point Capital of Greenwich, Connecticut.

Telit Completes Unit Sale

Telit Communications, an Israeli developer of communications technology between electronic devices and the Internet of Things, has completed the $105M sale of its automotive unit to TUS of China. The sale was originally agreed on last July.

German Firm Acquires Scanning Unit

Rhode & Schwartz, a German electronics firm with HQ in Munich, has acquired the body scanning unit of Israel’s Camero Tech for an undisclosed sum. Camero Tech, whose base is at Kfar Netter, a moshav not far from Netanya in central Israel, develops sense-through-the-wall and body-scanning products for defense and law enforcement agencies. Since 2011, it has been a part of SK Group, an Israel-based privately held technology and innovation holding company.

 

Aerospace and Defense

8th Largest Arms Exporter

Israel is the world’s eighth largest exporter of arms, according to a March report by SIPRI, the Stockholm International Peace Research Institute. According to the report, Israeli arms exports increased by more than 50% in 2014-18, with India, Vietnam and Azerbaijan as its largest customers. During the same period, Israeli arms procurement tripled, principally from the U.S. and Germany.

David’s Sling Upgrade Tested

The Defense Ministry has announced successful completion of trials of upgrades to the David’s Sling (Magic Wand) system for defense against medium-range ballistic missiles. The trials were conducted at a Rafael Advanced Defense Systems site in southern Israel, in the presence of officials of the ministry’s weapons development division and the U.S. Missile Defense Agency. The announcement did not specify the nature of upgrades to David’s Sling, which has been operational since 2016.

THAAD Participation, in Perspective

Israeli defense officials emphasize that deployment of U.S.-made THAAD (Terminal High Altitude Area Defense) systems for exercises in Israel in early March is not connected to immediate regional developments or threats. According to a report in the Jerusalem Post, THAAD’s presence for month-long exercises is designed to enhance coordination between the American system and Israel’s three-layered missile defenses, consisting of Iron Dome, David Sling and the Arrow. “The coordination should have taken place years ago,” Uzi Rubin, former head of Israel’s Arrow project, told the JPost.

Rafael Rocks

In February, Government-owned defense contractor Rafael Advanced Defense Systems unveiled ROCKS, its new air-to-surface missile capable of destroying underground targets, at the Aero India defense show in Bangalore. Rafael, which declines to disclose the range and payload of ROCKS, says the missile, which travels faster than the speed of sound, can hit moving targets and anti-missile navigation systems.

Rafael also unveiled its Mini-Harpy loitering missile, a “kamikaze drone” that can fly over an area until a target is spotted, then directed to fly into the object carrying a payload of up to 8 kg.

Goes into Space

Rafael Advanced Defense Systems has entered the satellite field, unveiling LitSat, a nano-satellite system it says can cover the Earth and provide surveillance less expensively than existing systems. In doing so, Rafael has moved into a field formerly dominated in Israel by its fellow government-owned Israel Aerospace Industries. Based on groups of nano-satellites operating simultaneously, LiteSat is designed for the military, but is adaptable to other missions, including weather observation, agriculture or monitoring natural disasters. Rafael reportedly envisions launching several nano-satellites from the same launch vehicle and stationing them in orbit at 350-400 km above the Earth’s surface.

Elbit Profits

Elbit Systems, Israel’s largest private defense contractor, posted profit of just over $6M for 2018. Elbit had sales of $3.7B and an orders backlog of about $9.5B. In the last quarter of 2018, Elbit completed the acquisition of Israel Military Industries from the government for NIS1.8B (about $500M).

Elbit America-Harris Night Vision

Elbit Systems of America, a wholly owned subsidiary of Elbit Systems, has signed an agreement to purchase Harris Night Vision for a reported $350M. Harris, based in Roanoke, Virginia, produces night vision equipment for the U.S. military and homeland security agencies. The agreement is contingent on the proposed merger of Harris and L3 Technologies.

India Orders

India is purchasing 50 Heron unmanned aerial vehicles from Israel Aerospace Industries in a deal valued at $500M. The Heron, a medium-altitude long-endurance drone capable of performing strategic and tactical missions, can carry a payload of up to 470 kg, stay in the air for more than 45 hours, reach 35,000 feet high and has a flight range of 350 km.

In recent years, the Heron has also been sold to France and Turkey and leased to Canada and Australia. Morocco also operates the Heron acquired from France.

Rafael Advanced Defense Systems will supply $30M worth of advanced communications systems to the Indian Air Force, the government-owned defense contractor announced in late February. Production will be by ARC, Rafael’s new Indian subsidiary in Hyderabad, where hundreds of workers will be employed. The contract also includes maintenance and technical assistance to Indian Air Force personnel.

Shipyards for Sale

Government-owned Israel Aerospace Industries is putting its Ramta Shipyards up for sale, according to a report in Globes. Ramta, located in Beersheba, has manufactured Dvora and Super Dvora patrol vessels for the Israel Navy. One prospective buyer:  Haifa-based Israel Shipyards, owned by businessmen Sammy Katsav and Shlomi Fogel.

Elbit Wins Helmet Contract

Elbit Systems says its U.S. subsidiary has been awarded a 5-year U.S. Army contract to provide Common Helmet Mounted Display systems. Financial details were not disclosed. The CHMD will be part of the Air Soldier System used by helicopter pilots to provide day and night enhanced situational awareness and survivability in all flight conditions. It will be fully-integrated into Elbit’s Helmet Display and Tracker System on U.S. Army CH-47F Chinook and UH-60L/M/V Black Hawk helicopters.

Greek Contract

Elbit Systems said it has been awarded a contract from Cantiere Navale Vittoria SpA, an Italian company, to supply combat suites and perform systems integration for three new patrol vessels of Greece’s Hellenic Coast Guard. Value of the contract was not disclosed. The equipment to be supplied includes electro-optic payloads, radar, navigation and warship-identification systems.

Roboteam Italian Contract

Roboteam, a developer of unmanned tactical surface vehicles based in Tel Aviv, has been awarded a $10M contract to provide platforms for the Carabinieri, Italy’s national gendarmerie. The deal follows recent contracts with Japan and South Korea.

Eltel Chosen

Eltel Technologistics has been awarded a contract to supply drones to the Israel Defense Forces. The Ramat Gan-based provider of logistics, training, simulation and other services to government agencies was chosen over Israeli defense contractors Israel Aerospace Industries and Elbit Systems, and Yunec International of China. The unmanned aerial vehicles will serve as observation posts for units of the IDF, which currently deploys 400 drones for various missions. Eltel has partnered with CopterPix Pro, an Israeli UAV start-up based in Kibbutz Karmiya, just north of the Gaza Strip. CopterPix was founded in 2013 by veterans of IDF UAV units.

Elbit Signs India Helmet Deal

Israel’s Elbit Systems and Bharat Electronics Ltd. (BEL) of India have signed an agreement to produce Elbit’s HMDS and HPS helmets in India, according to a report on the Israel Defense website. Value of the deal was not announced.

Panther Passes Final Tests

A prototype of the Panther has passed its final tests and limited production of the IDF new multipurpose armored combat vehicle is due to begin soon. According to a report on the YNet website of Yediot Aharonot, the new vehicle replaces the Ze’ev (Wolf), which has been deployed by regional brigades for 15 years and the Sparrow, a smaller version of Safari trucks.

Based on an Oshkosh platform already in use by U.S. military units, the Panther will be capable of carrying 12-14 troops; flame and heat-resistant exterior paint, protective panels designed to be bulletproof against light weapon and machine-gun fire, with the possibility of attaching heavier armor for protection against anti-armor rocket fire.

IAI Anti-Jamming Upgrade

Israel Aerospace Industries recently introduced ADA-O, an upgraded anti-jamming platform to assure GPS accessibility to ground platforms. IAI recently concluded the sale of an ADA platform to an unnamed Asian country, in a transaction valued at tens of millions of dollars.

Elta Takes Eltel Stake

Elta Systems, a subsidiary of Israel Aerospace Industries, is purchasing 50% of Eltel from Malam Team for NIS 42M. Eltel, which will be jointly managed by Malam and Elta, offers instructional, training, integration, and product maintenance services to government ministries and defense firms.

IAI Losses

Government-owned Israel Aerospace Industries lost $47M in 2018, a sharp turn-around from its $79M profit in 2017. The loss came despite a 5% increase in revenue, to $3.7B. IAI’s orders backlog grew by $2.3B in 2018, reaching $13.5B at the end of the year.

Navy Gets Elta Radar

Elta Systems has won a contract to supply four ELM-2248 Multi-System Radars to the Israel Navy. The systems will be installed on new Sa’ar 6-class corvette warships recently acquired by the Navy, whose mission is protection of the Israeli maritime domain and natural gas platforms against missiles, rockets and hostile aircraft. Value of the deal was not announced.

Artillery Deal Signed

Elbit Systems has signed a NIS 1B, 12-year Defense Ministry contract to provide artillery guns. The Israeli defense contractor’s ATMOS fully-automatic self-propelled howitzers will replace the IDF aging M109 guns in use for the past 40 years.

India Uses Israeli Arms

The Indian Air Force used missiles fitted with Israeli-made Spice guidance kits during a late February retaliatory attack on Pakistani forces in disputed Kashmir, according to a report by Indian news outlets. Spike is made by Rafael Advanced Defense Systems.

Licenses Suspended

The Defense Ministry has suspended the export and marketing licenses of two subsidiaries of Tel Aviv-based Ability Inc. for what it says are violations of the export control law. Ability, which provides interception, geolocation and cyber intelligence products to security agencies, was founded in 1994; the subsidiaries subject to the ban are Ability Security Systems Ltd. and Ability Software and Computer Systems Ltd. Details were not disclosed, but press reports indicated that both firms had conducted business without the proper licenses from the Defense Ministry.

Crop Spraying UAV

Adama Agricultural Solutions, an Israeli company acquired in 2017 by a subsidiary of ChemChina, and Tactical Robotis of Yavne, southeast of Tel Aviv, are collaborating on adaptation of Tactical’s unmanned aerial vehicle for spraying crops. Tactical’s Cormorant, a vertical take-off UAV originally designed as a remote-controlled aerial rescue vehicle, able to fly low and inside obstructed terrains, can carry a payload of more than 500 kilograms, take-off without a designated airstrip, and be transported by truck. A pesticide spraying UAV would lower risk of pilot injuries and improve pesticide penetration by flying lower than manned planes.

Tactical is a subsidiary of Urban Aeronautics, whose founder Rafi Yoeli had developed prototypes of what observers have called flying cars.

India Tests QRSAM

India has tested its home-grown QRSAM missile-defense system against the background of recent tensions with Pakistan in the disputed Kashmir region. The quick-response medium-range missile defense test took place in Chandipura. Developed by Bahrat of India and the Indian Defense Ministry, QRSAM was chosen several years ago over two Israeli contenders, Israel Aerospace Industries’ Barak ABISR and Rafael Advanced Defense Systems’ Spyder.

Tanker Request

Israel reportedly will seek to increase its attack capability by purchasing Boeing KC-46 tankers from the U.S. The aircraft would replace converted Boeing 707 aircraft currently in IAF service. Acquisition of the advanced American aircraft would provide a significant upgrade to the ability to attack targets in Iran, according to a report on Israel’s Walla! website.

Radar Collaboration

Lockheed Martin and Israel’s Elta Systems are finalizing plans for collaboration in the U.S. Army’s “sense-off” demonstration of battlefield radar, according to a report in the authoritative Defense News. The demonstration is part of a process that has been going on for some time, in which the U.S. Army seeks to replace its aging Patriot radar with a detection system that has 360-degree capability.

 

Science & High Technology

Tech Firms Report

Israel had 6,673 active high-tech companies and start-ups as of the end 2018, according to a report published by Start-Up Nation Central. Artificial intelligence was the most popular, with 17% of all companies.

Electric Road Pilot

The city of Tel Aviv, the Dan public bus company and ElectReon are launching a pilot stretch of road for electric charging of vehicles, ElectReon announced in late February.  ElectReon, based in Rosh Ha’ayin northeast of Tel Aviv, said its charging infrastructure will be installed across a kilometer-long stretch of road where Dan will operate one of its electric buses to test its efficiency. When the pilot will begin or the location of the road where the infrastructure will be installed were not disclosed.

Netafim Wins India Contract

Netafim, the Israeli developer of advanced drip irrigation systems, has been awarded a $100M contract for four large community irrigation projects in the Indian states of Karnataka and Andha Pradeshin. Netafim, founded on two Israeli kibbutzim and still based in Kibbutz Hatzerim near Beersheba, will provide irrigation solutions for over 60,000 farmers in over 100 villages in an area of 550,000 dunam (137,500 acres).

Autonomous Sprinklers?

Prospera Technologies of Tel Aviv has entered into a strategic partnership with Valmont Irrigation, an international leader in precision irrigation with HQ in Omaha, Nebraska. Over a three-year span, the partnership, using thousands of acres of fields already irrigated by Valmont’s Valley subsidiary, seeks to develop an automated system for determining water needs and irrigation without human intervention. According to a report in Globes, the technology eventually will be able to determine if crops are getting too much or too little water and/or fertilizer, plan and execute a solution automatically.

BMW Tech Center

BMW, the German carmaker, is opening a new tech center in Tel Aviv, to take advantage of the Israeli start-up scene. It said the center’s small and versatile multidisciplinary staff will work actively with local companies and academic researchers. At about the same time, BMW will begin testing autonomous car prototypes in Israel.

Wireless Heart Pump

Leviticus Cardio, an Israeli developer of wireless power-transmission technology based in Petah Tikva, outside Tel Aviv, has provided the power for the world’s first wireless mechanical heart pump implanted in a human patient. The pump, implanted in a 24-year-old man in Astana, Kazakhstan, was manufactured by Jarvik Heart of New York, a developer of similar devices, which up to now have required a wire running through an incision in the skin attached to a power source. In the Leviticus solution, the device’s internal battery is replenished periodically through a lightweight vest that the patient wears during charging periods.

Automatic Speech Transcription

Verbit, a Tel Aviv-based start-up with additional offices in Kiev, Ukraine, has unveiled a new system that automatically transcribes speech. Transcription is based on a per-minute business model, after which a person fluent in the language spoken, checks and corrects the automated transcript, considering room acoustics and the language being spoken.

Skoda’s Israeli Ties

Skoda, the Czech automaker, says it plans to expand cooperative ventures with Israeli start-ups in fields related to the automotive industry. Among the 13 Israeli firms already working with the Digilab center it opened in Tel Aviv in 2017 are Anagog, an artificial intelligence specialist, electricity storage and charging developer Chakratech and Uveye, which has developed a camera to scan the underside of vehicles and detect damage.

Protecting Cards

A team of former Israel Air Force technical specialists has moved into the private sector, turning from aviation and missile defense to protecting automobiles from cyberattacks. GuardKnox, based in Ramle not far from Ben-Gurion International Airport, specializes in security for interconnected networks in modern automobiles, which typically are fitted with as many as 10 computerized networks and up to 150 computerized units. According to a report in the Jerusalem Post, GuardKnox staffers include veterans of systems on F-15 and F-16 aircraft and on teams dealing with security of Israel-developed missile defense systems.

Boost for Teva

Teva Pharmaceutical Industries, Israel’s Big Pharma, got a much-needed boost in early April, when European authorities upheld its patent for Copaxone, Teva’s proprietary treatment for multiple sclerosis. The decision means that Teva can continue efforts to block sales of generic versions of the drug, which accounted for European sales of over $500M last year.

European Commission authorities also approved Ajovy, Teva’s branded injectable monoclonal antibody treatment for migraine, for sale in the 28 countries of the EU, as well as Iceland, Norway and Lichtenstein.

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