Senior Partner and Head of the firm's M&A Practice, Sharon Amir, along with partner Tuvia Geffen, Head of International Capital Markets and a senior member of the M&A team, as well as leading M&A partners Einat Rosu, Idan Lidor, and Tal Eliasaf have co-authored the Israel chapter for the Corporate M&A Global Practice Guide. The chapter offers comprehensive coverage of various aspects involved in acquiring a company, including antitrust regulations, foreign investment restrictions, stake-building, negotiation, mandatory offer thresholds, conditions for takeover offers, squeeze-out mechanisms, disclosure, duties of directors, defensive measures, and shareholder activism. Additionally, the authors provide a review of the Israeli M&A market in 2022 and offer predictions for the future M&A outlook.
The number of mergers and acquisitions (M&A) in Israel decreased by approximately 40% in 2022, with 142 M&A deals compared to 238 deals in 2021. However, the overall value of deals increased by 5% to USD18 billion in 2022, excluding special purpose acquisition companies (SPACs) and IPOs. The average deal value also rose to $202 million, a 61% increase from the previous year. This increase was primarily due to the surge in company values and the rise in the number of megadeals over USD1 billion, representing 37% of the total 2022 deal value.
The market uncertainty and the increase in interest rates resulted in an unstable M&A market in 2022, with the number of deals decreasing as the year progressed. However, the M&A volume is expected to pick up in the mid to long term after a short-term breather to evaluate market uncertainties.
Israeli companies accounted for 19% of the deal count in 2022, with a total value of $3.5 billion, and outbound M&A deals of Israeli companies acquiring targets outside of Israel contributed to $3.3 billion of deal value.
Hi-tech M&A deals dominated in 2022, with a deal value of $9.3 billion, accounting for more than 50% of the total deal value. Finance, energy, consumer products, and services also experienced growth in 2022 mainly due to a handful of high-value deals. Leveraged deals were at a decade low with a total of 12 deals, or 8% of all deals, reflecting the difficulty of executing attractive deals with the target prices soaring and the cost of funding increasing due to the spike in interest rate levels.
Read the full chapter here.