Friday, August 11, 2006

M&A in Israel - Were they right?


I was looking for information on M&A in Israel and I found this interesting forecast by Morgan Stanley (MA) from 2001. Many things changed politically and economically since the forecast was put together, but it's still very much relevant.

Israel: Venture Capital -- The Technology Incubator

Serhan Cevik (London)

This is an excerpt from a country report on the Israeli economy, Technology - Deus Ex Machina, 24 pp, 12 February 2001.

Get ready for the M&A boom in Israel. The amount of mergers and acquisitions (M&A) around the world reached US$3.5 trillion in 2000, according to Thomson Financial Securities Data. In the meantime, the value and number of M&A deals in Israel rose to 302 and US$11.0 billion in 2000, from 274 and US$9.6 billion in the previous year. Industry sources expect a slowdown in worldwide M&A activity this year on the back of falling equity prices. Especially, the technology, media and telecommunications (TMT) sector, which accounted for 40% of worldwide M&A deals in 2000, is likely to go through a hibernation period. Nevertheless, we expect the wave of consolidation in emerging markets to remain relatively unbreakable, as the coming economic slowdown puts tremendous pressure on companies to restructure. Moreover, many Israeli start-ups are getting mature enough to become attractive targets for M&A. For example, Lucent Technologies, an American giant in the communications technology sector, recently took over Chromatis Networks, an Israeli company specialising in optical equipment, for US$4.5 billion. We expect the number of M&A deals targeting Israeli companies to grow considerably in 2001 and beyond, and directly (or indirectly) to attract capital flows to the country.

In conclusion - Chromatis might not exist anymore, but Warren Buffet's 4B in Iscar and the record investment level in Israeli startups kept the country on the map.

More of these to come, I appreciate your feedback!

Eze

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Each individual human being possesses a unique, highly
developed, and sensitive perception of diversity. Thus
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Quantitative and qualitative choice-making thus lends
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Human is earth's Choicemaker. His title describes
his definitive and typifying characteristic. Recall
that his other features are but vehicles of experi-
ence intent on the development of perceptive
awareness and the following acts of decision and
choice. Note that the products of man cannot define
him for they are the fruit of the discerning choice-
making process and include the cognition of self,
the utility of experience, the development of value-
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ation of civilization.

The arts and the sciences of man, as with his habits,
customs, and traditions, are the creative harvest of
his perceptive and selective powers. Creativity, the
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At 5:15 PM, Anonymous Prize said...

I think that you are right; there are so many innovative companies in Israel; and like the M&A deals that you mentioned, the technology in these companies will be critical for the companies that they merged with in order for them to stay on the cutting edge. By the way, this blog is amazing; I really love it.

 

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