Monday, May 25, 2015

China M&A activity in Israel shifts beyond high tech

TEL AVIV | By Tova Cohen

REUTERS - Thu May 14, 2015

When one of China's biggest food companies was looking to boost its dairy output it turned to Israel's tiny market, paying about $1.1 billion for control of the country's largest food maker.
Even though the company Tnuva is focused on the Israeli market, China's Bright Food was attracted to its efficiency in milk production and cutting-edge technology in quality control for use in China, where demand for dairy products is surging.
The deal is the latest example of how M&A activity in Israel is shifting from the booming high-tech sector, which has been the focus for nearly two decades and is now valued at some $40 billion, or nearly 13 percent of gross domestic product.
High-tech firms are increasingly going for listings rather than seeking buyers, but Israel's reputation as a center for innovation is rubbing off on more traditional industries.
Firms with a niche, a high level of exports or efficient production processes, such as Tnuva, are attracting buyers, particularly from Asia."Clearly one of the things interesting investors is that they are buying some sort of innovation," said Adir Waldman of Freshfields Bruckhaus Deringer, a law firm that represented Bright Food in the Tnuva deal, which closed a month ago.

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