Weak US economy won't stop the buying of local firms

Among the biggest acquisitions of 2007 were Nice buying Actimize for $280m.

The expected slowdown in the US economy will not lead to a slowdown in the number of Israeli companies bought by foreigners, the Manufacturers Association of Israel said Monday. Reports last week showed US hiring and manufacturing slowed the most since 2003, leading to a drop in worldwide markets. The jobless rate in the US rose to 5 percent in December, the highest in two years, from 4.7% in November, a government report said last week, while payrolls rose by 18,000, the least since August 2003. When coupled with the decrease in home purchases, this news significantly increases the possibility of a recession, experts say. In 2007, some 70 local manufacturing companies - three-fourths of them from the hi-tech sector - were purchased by foreigners for $5.02 billion, while Israeli firms bought 44 local companies for an additional $2b., the Manufacturers Association said in a recent report. The trend is not expected to slow down this year despite the current economic situation in the US, according to Manufacturers Association president Shraga Brosh. "The slowdown in the US stemming from the subprime crisis won't make Israeli companies less attractive to foreign buyers," he told The Jerusalem Post Monday. "We expect that in 2008 we will continue to see many of our manufacturing companies bought up by foreign companies." Dozens of manufacturing companies, Brosh said, including hi-tech, metal and electric, food, plastics, textile, furniture, shoes, chemical and construction equipment firms, continue to seek out new investments and partnerships with international businessmen. The efforts of these companies, he said, result in the "continued development of the Israeli economy and the local manufacturing industry." While 2008 is expected to bring with it moderate growth in terms of the amount of money generated from the sales of local manufacturing companies, the Manufacturers Association does not expect results such as those enjoyed in 2006, when foreign companies and businessmen, led by Warren Buffet's purchase of Iscar Metalworks for some $4b., snapped up $18.5b. worth of Israeli companies. "We have to be realistic, and 2006 was not a normal year in terms of the amount of foreign purchases made here," Brosh said. "We are not going to get an Iscar every year." According to the Manufacturers Association, 35 local hi-tech firms purchased 94% more foreign companies in 2007 than Israeli companies bought in 2006. But the $1.78b. spent on the purchases was a 10% jump from 2006. Purchases of Israeli hi-tech firms, however, dropped considerably last year compared to 2006, as 62 companies were bought by international firms for $3.7b., an almost $10b. decrease from 2006. Among the biggest acquisitions of 2007 were Nice buying Actimize for $280m., Spansion getting Saifun for $368m., AOL purchasing Quigo for $300m., DSPG buying NXP for $500m. and the Swarth Group purchasing ECI Telecom for $1.24b.