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Market
Trends and
Insight
2014 proved to be a remarkably prosperous year for investment activity into Israel
and amongst Israeli players. A notable trend which surfaced in the last few years and
which increased substantially in the past two years is the interest of Chinese and
other Asian investors in Israel. Large transactions involving Asian investors which
took place recently include the acquisition of controlling stakes in some of Israel’s
largest corporations, such as food conglomerate Tnuva by China's Bright FoodGroup
and insurance provider Phoenix Holdings Ltd. by China's Fosun International Ltd.
Other notable transactions are the acquisition of Viber (communication application)
by Japan's Rakuten, of Tambour (paint company) by Singapore’s Kusto group and of
Lumenis Ltd. (minimally-invasive clinical solutions) by China's Xio Group. The current
auction for insurance provider Clal Insurance has also attracted interest by various
Chinese players.
This has been rapidly increasing in the past few years as Israel has become a
leading force in the area of high-tech. Areas of high-tech which have soared to new
heights in particular are the fields of cyber security, real-time computing, Internet of
Things software, cloud services and big data-analytics. These fields have increased
popularity globally as concerns of privacy, security and a gravitation to all things
whichmake life easier and products more accessible, is exponentially growing. Digital
marketing, cleantech and life sciences have also gained traction and lead to IPOs, for
example, in the digital marketing area, Matomy Media’s IPO on the London Stock
Exchange. As these areas fall within Israel's top specialties, Israel has achieved a
clear upper hand on a global scale as one of the key players in leading technologies.
Foreign interest in Israeli companies is expected to grow in the coming years, with an
increasing focus on the high-tech sector.
It is noteworthy that although technological advancementsmay be viewed as Israel's
most attractive asset in the marketplace, it has not prevented sizable investments
and acquisitions of ‘old economy’ companies that have gained attraction with
overseas buyers (triggered in part by the enactment of the Law for the Promotion of
Competition and Reduction of Concentration described below), illustrated, among
other, by the recent transactions with Asian investors in the past few years.
In addition to the fast growing trend of Asian investments in Israel, there has
been a continued influx of interest by foreign investors in Israeli technology
companies.