How India is Acquiring the Biggest Companies in Israel

Explore how India is strategically acquiring major companies in Israel, marking a significant shift in economic and technological partnerships. This article delves into key acquisitions like Reliance Industries' Tower Semiconductor and Sun Pharma's Taro Pharmaceuticals, highlighting the growing ties between Indian multinationals and Israeli high-tech industries. Understand the role of diplomatic relations, especially between Netanyahu and Modi, in facilitating these investments and joint ventures, and their impact on the global economy and bilateral trade

Nov 26, 2023 - 10:51 Updated: Nov 26, 2023 - 11:05

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How India is Acquiring the Biggest Companies in Israel

Saudi Arabia, the United Arab Emirates, and Qatar have been named by some as India's closest Middle Eastern allies. They invest billions of dollars in India, demonstrating their friendship for the nation. For example, Saudi Arabia has even pledged to invest more than $100 billion in India! That alone demonstrates the significance of India to Saudi Arabia and vice versa. Still, one Middle Eastern nation may be significantly more significant to India than all others together. Even though Israel is a very small nation, it has an intriguing partnership with India despite having little influence on investments there. How? You see, they depend on more than just "money" in their relationship with India.

Of course, a lot of it involves money. However, their political backing, military connections, and—above all—their friendship—between Benjamin Netanyahu and Narendra Modi are just as significant. India and Israel's friendship is growing thanks to the friendship between these two leaders. We won't go into great detail about the two countries' political and military ties because it isn't the focus of today's discussion. However, it's critical to recognise that these are the catalysts that allow Indian companies to grow and finance Israeli startups, industry leaders, and enterprises.

Given that India's economy is currently one of the fastest-growing in the world, Indian entrepreneurs have built billion-dollar businesses thanks to their investments. With a gross domestic output of over 3.3 trillion US dollars as of 2022, India is more than capable of acquiring significant companies worldwide. These companies, which include the Tata Group, Infosys, Reliance Industries, and many more, are major investors. And a portion of them are making it to Israel. Let's get this topic started right away by talking about the products that Indian businesses are purchasing in Israel. Is it on land? Is it commercial? If yes, what is the size of these companies? Let's begin by giving something some thought.

This is a significant consideration because it is one of the biggest ever announced, but because it is new, it hasn't yet been implemented. As of the time of this writing, Reliance Industries had declared its intention to purchase Tower Semiconductor, an Israel-listed business, sometime in 2023. Although the purchase price has not yet been disclosed, it is known that American corporation Intel attempted to purchase the same business for $5.4 billion, but the agreement ultimately fell through. Reliance wants to seize the moment now. But why is this so important? Well, Tower Semiconductors is an essential component of the entire global chip supply chain, even without considering the staggering numbers. The company specializes in producing analog chips as well as vital parts for cell phones, medical devices, and other products.

Conversely, the Reliance Industry still makes a significant amount of money from traditional operations and less from ones involving modern manufacturing. After this purchase closes, Reliance Industries and India will have direct access to the semiconductor competition, opening up a new world for them. Yes, this transaction is significant because it will allow Reliance, or India, to eventually have a billion-dollar semiconductor company that can truly compete on a global scale. And pay attention to this: Tower Semiconductor isn't your typical little company. The business is expanding quickly. Its revenues increased from 300 million dollars in 2009 to nearly $1.68 billion by 2022!

Additionally, Tower Semiconductor has fabrication facilities in both Israel and the US, so if Reliance is successful in acquiring the company, they will have access to both Israel's and maybe the US's prowess. Although it appears promising, there's still a chance that it won't last.

Second, in addition to Reliance Industries, there is Sun Pharma, an Indian multinational that purchased Taro Pharmaceuticals, an Israeli corporation. This transaction had a lengthy past that began in 2007. However, it finally became a subsidiary of Sun Pharma. Taro Pharmaceutical is a large company now, with assets valued at over $1.3 billion. Similarly, they will allow India to establish a foothold in the Israeli pharmaceutical sector and anywhere Taro is situated, as well as in terms of technology. Pharmaceutical research and technological improvement are two important ideas that might help Indian companies succeed in both domestic and foreign markets.

There are currently port-related purchases as well. A partnership with Adani Ports as its leader purchased Haifa Port, the biggest port in Israel. The entire cost of this deal was roughly $1.15 billion. In 2021, the northern port of Haifa handled over 56% of the nation's cargo volume. This is an investment that can be made right away. It is no small matter to have access to Israel's main port, which handles more than half of the nation's cargo traffic.

This will make it easier for additional money to flow from India to Israel. What else is there, considering that they control the biggest port in the nation, a sizable pharmaceutical company, and potentially the top semiconductor company as well? If you've been paying attention, a tendency has already become apparent. Indian companies are buying some of the biggest Israeli companies, but this is not the only transaction going on. That needs to make it clear right away how important Israel is to India and vice versa. And last, Infosys is a significant participant.

The sizable Indian software company acquired the Israeli company Panaya for about $200 million. Panaya is a significant acquisition for Infosys, even if it was a lesser deal than the others since it gives the company access to cutting-edge high-tech innovation. With an emphasis on ERPs and CRMs, Panaya specializes in cloud-based testing and software-as-a-service change impact assessments. That may sound a little complex, but to put it simply, Infosys will be able to enter a new market thanks to this acquisition. Let's go on and talk about some more important information. You see, although acquisitions hold significance, there are transactions that are equally crucial.

We'll see partnerships and joint ventures next. The Tata Group serves as an excellent example. They established a joint partnership with Israel Aerospace Industries. an enterprise focused on military products! After that, the two nations would collaborate to produce radars and tanks. These are significant because, as we mentioned previously, there are growing military links between the two nations. These partnerships will not only guarantee their growth but also a favourable outcome from a financial standpoint and might even contribute to a change in the Middle East's geopolitical landscape. Additionally, businesses are not the only partners in this system.

Over the years, agreements have been reached between the governments of Israel and India. One of them was the signing of an industrial research and development cooperation agreement between the two nations. This would make cooperation possible in crucial industries like electronics, aviation, and healthcare. Numerous commentators noted that India stands to benefit greatly from Israel's deep expertise in semiconductors, quantum computing, and artificial intelligence. All of these previous collaborations have now had a significant effect in other industries. For example, the number of Indian workers in Israel's IT sector has increased. Indians are playing an increasingly important role in Israeli firms, from cybersecurity to software development.

Approximately 18,000 Indians live and work in Israel, making up a large population. Even though it's not much in comparison to larger nations like the US, it's nevertheless helpful to remember that Israel is a tiny country. The impact is also significant because Israel's IT industry boosts remittances and elevates India's standing as a leading tech nation worldwide. Let's now discuss the military component.

Drones, radars, and missile defence systems are among the cutting-edge defence equipment that India has been purchasing from Israel. For instance, India purchased the Barak-8, a long-range surface-to-air missile that Israel Aerospace Industries and India's DRDO jointly developed. This is a partnership with ramifications for India's technology potential, not merely a transaction. The reason this occurred is also crucial to comprehend in the present.

There are, of course, a variety of factors. For example, the expanding economies of Israel and India, as well as the allure of Israel's tech industry, can be mentioned. However, there is little doubt that Netanyahu and Modi's alliance is a major contributing factor. In recent times, the two leaders have been enhancing their bond, even if their previous connection was not particularly close.

Lastly, before I conclude this article, let’s talk about the impact on both countries, which is the last section of today's film. Indeed, there's a big influence! despite the fact that it is a little figure in relation to others. For example, Israel is a relatively small nation. In the long run, these billion-dollar acquisitions will have a significant impact. Conversely, India stands to benefit greatly from technological advancements rather than economic ones.

Israel is well known for being a developed country. These kinds of acquisitions will give Indian businesses a greater competitive edge in international markets. But anyway, thanks for reading!

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