Tens of billions of dollars at stake: The struggle against the IPO of IAI and Rafael on NASDAQ

The Association of Public Companies expresses strong opposition to the state's intention to list Israeli defense companies and their subsidiaries on foreign stock exchanges, particularly on NASDAQ. This involves offerings worth tens of billions of dollars.

"I would like to express our clear position that Israeli defense companies should be listed on the Tel Aviv Stock Exchange," wrote Ilan Plato, CEO of the Association of Public Companies in Israel, who previously served as the head of the defense sector in the Ministry of Finance's Budget Department, to Minister of Finance Bezalel Smotrich, Minister of Economy Nir Barkat, and the Minister responsible for Government Companies, David Amsalem.

In his appeal, Plato states that defense companies are a strategic asset of the State of Israel and are not "ordinary" companies: "These are strategic assets of the State of Israel, which constitute an integral part of its security, technological, and industrial strength." According to the association's CEO, global demand for Israeli defense technology is at a peak, the companies' order backlog is growing, and interest from investors in Israel and around the world is increasing. Precisely for this reason, a situation should not be accepted in which the State of Israel examines the listing of these companies abroad without considering the Tel Aviv Stock Exchange as the central, natural, and primary destination for their IPO.

Plato further argues that the Israeli public should be a partner in the success of the defense companies, and a listing on the Tel Aviv Stock Exchange would enable this. Only recently it was revealed that Israel is examining an IPO in the US for Israel Aerospace Industries (IAI) and Rafael, in an attempt to reduce disclosure requirements regarding classified projects and to sell up to 30% of the companies' shares in the offerings. These are the two largest government-owned defense companies, and the intention is to list them outside of Israel, mainly to avoid stricter disclosure requirements that exist on the local exchange. At this very moment, government representatives and the two companies are examining the possibility of conducting an initial public offering of the leading Israeli defense companies in the US. Their listing is expected to inject billions of dollars into the state treasury, as defense expenditures continue to rise.