On Wednesday morning, well before the Oslo stock exchange opened, it was announced that Israel Corp. will pay NOK 530.8 million (€52.3 million) for a strategic ownership position in the equipment supplier AKVA group.
But what exactly is Israel Corp.?
Privatization
Israel Corporation is Israel’s largest holding company. It was founded in 1968 by the country’s government. The company, which is listed on the Tel Aviv Stock Exchange, manages US$4.3 billion in assets.
The company’s most important investment areas are fertilizers and specialty chemicals, energy, transportation and technology. During its emergence, acquisitions of state-owned companies (through privatization) have been central.
Israel Corp. owns just over half of the fertilizer manufacturer Israel Chemicals, 40 per cent of the solar cell supplier Tower Semiconductor, and almost the entire shipping company Zim Integrated Shipping. The company also owns 100 per cent of the shares in the Latin American power company Inkia Energy and IC Green Energy, which invests in renewable energy, including solar energy and biofuel, in Israel.
In November 2019, Israel Corp., according to Yahoo Finance, made a strategy change, in which plans were presented to increase the portfolio through investments of US$300-350 million in the coming years. The focus was particularly on food, including technology, health and so-called industry 4.0.
Flexible
According to a presentation on this change of strategy, each transaction should be US$70-100 million and located in either Europe or Israel. Typically, the company seeks influence, but not necessarily majority ownership. The investment horizon was defined as “flexible”.
The largest investor in Israel Corp. is Millennium Investments Elad in Haifa, with just under 47 per cent of the shares. Among the shareholders are also heavy players such as BlackRock and Vanguard.
The news of a new strategic owner in the AKVA group has been well received, with the equipment supplier’s share price shooting up 12 per cent on Wednesday morning.
In the first round, AKVA announced that the company had finalised the contract for the full grow-out RAS project from the Norwegian company AquaCon. The main business of the AKVA group, however, is not salmon on land, but salmon at sea. Traditional cage technology for fish farmers in Northern Europe still accounts for the vast majority of the company’s revenues.
