Elbit broadens prime contractor position with Mikal deals

Israel's largest private defence contractor Elbit Systems is to acquire former competitor Mikal Group's defence subsidiaries – Soltam Systems, Saymar Ltd and ITL Optronics – it was announced on 2 September.

The deal follows the USD18 million loan granted to Mikal by Elbit a year ago, providing the latter with a 19 per cent stake and the right to acquire all remaining shares of Mikal.

However, under the latest accord, "rather than [make] the acquistion of Mikal itself, as was contemplated in Elbit Systems' prior announcements", Elbit has agreed to sell its share in the company to other Mikal shareholders for USD18 million, while Elbit will acquire a 100 per cent interest in Soltam and Saymar and 87.85 per cent of ITL at a total cost of USD87 million, said the company.

The latest agreement contains a provision for possible future payments to Mikal, subject to the acquired subsidiaries "achieving certain business goals", Elbit said.

The acquisition will bolster Elbit's land and C4I (command, control, communications, computers and intelligence) operations as well as its activities in the electro-optics field.