Israel Aerospace Industries (IAI), one of Israel's largest defense companies, is moving ahead with plans to absorb its subsidiary ELTA Systems, a major developer of radar, intelligence and electronic warfare technologies, in a restructuring aimed at simplifying operations and strengthening the company's position in the global defense market.
IAI's board of directors approved the merger agreement on Wednesday, October 28, following government approval announced in July. The transaction is expected to be completed by the end of 2027, provided the company obtains the remaining regulatory approvals and meets other conditions. The deadline could be extended by mutual agreement.
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Israel Aerospace Industries (IAI) is moving ahead with plans to absorb its subsidiary ELTA Systems
Under the proposed arrangement, ELTA would cease to exist as a separate legal entity, with all its assets, operations, rights and liabilities transferred to IAI. However, the company would retain its name and continue operating as a division within the larger organization.
ELTA is a key part of Israel's defense industry, developing advanced radar, surveillance and electronic warfare systems used by the Israeli military and armed forces around the world. Its technologies are integrated into a range of defense platforms, making it a major contributor to IAI's international business.
The merger is part of IAI's broader "One Company" strategy, which seeks to consolidate operations, reduce administrative complexity and improve coordination between its various divisions. By eliminating the legal separation between the two companies, IAI hopes to cut bureaucracy, speed up decision-making and make it easier to share resources and expertise.
IAI Chairman Boaz Levy described the merger as a strategic move designed to strengthen the company's long-term stability and growth prospects.
"The merger of ELTA into IAI is a significant strategic move that reflects a long-term vision and organizational responsibility," Levy said.
IAI hopes to cut bureaucracy, speed up decision-making and make it easier to share resources and expertise. Arrow Missile.
(Photo: Israel Aerospace Industries (IAI))
He emphasized that the restructuring was being coordinated with employee representatives and that the company's workforce would remain central to its future.
IAI President and CEO Guy Bar Lev said the integration would allow the company to build on ELTA's technological capabilities while operating under a more unified corporate structure.
"The merger of ELTA into IAI marks a significant milestone in realizing our strategic 'One Company' vision," Bar Lev said.
He added that reducing internal administrative barriers and increasing organizational flexibility would help IAI compete more effectively in the international defense industry.
The company said the merger was being pursued in cooperation with employee representatives, with the goal of preserving ELTA's specialized expertise and workforce.
For ELTA, the restructuring would mean a change in corporate status rather than the disappearance of its operations or identity. For IAI, it represents an effort to bring one of its most important technology businesses more directly under the parent company's control.
The merger is not yet final. Its completion remains contingent on additional approvals from the relevant Israeli authorities, with the process currently targeted for completion by the end of 2027.