54 Israeli M&A Market Israel, often dubbed as the “Startup Nation,” has firmly established itself as a global technology hub. The country’s innovation ecosystem is a hotbed for cuttingedge developments, which in turn has helped the high-tech industry become one of the most important components in the Israeli economy. For companies, M&A transactions are often not just financial transactions but strategic moves that facilitate the global expansion of Israeli technology. For investors, their interest in Israeli technology companies driven by a fear of missing out on the next leap in technological advancement, is often part of their growth model, or in the words of Bob Iger, CEO of the Walt Disney Company “If you don’t innovate, you die”. Considering Disney’s numerous acquisitions during Iger’s tenure, the term “innovate” certainly includes the acquisition of innovative technologies. In recent years, technology and innovation have continued to act as a driving force in Israeli M&A activities, which were responsible for deals worth $8 billion, or 81% of the overall Israeli M&A deal value in 2023. The areas of cybersecurity, energy, and artificial intelligence in the Israeli market were of particular interest for foreign investors and acquirers. Cybersecurity is perceived by many to be an impetus in M&A transactions, as the rapid advancements in technology have led to a surge in cyber threats, and in numerous cases, Israeli technologies have played a pivotal role in providing protection against these evolving challenges. Israel’s energy sector, particularly renewable energy, and sustainability-focused startups, reflecting a global shift towards greener alternatives, continued to be a focus for M&A activities despite the general M&A global slowdown. Artificial intelligence is also considered to be a cutting-edge M&A focus, as companies seek to embed artificial intelligence technologies in their products through the use of predictive analytics, automation, and personalized customer experiences. Despite these promising factors, financial analysts reported that in 2023 mergers and acquisitions involving Israeli companies fell by 46% as compared to the previous year, and the total value of transactions fell by almost half (the lowest in the last decade). This sharp decrease was influenced by the global trend that began in the second half of 2022. However, the impact on the Israeli market was comparatively more significant, which can be ascribed to the political uncertainty prevailing in Israel in the first three quarters of the year, and the Swords of Iron War that broke out after October 7, 2023. Global M&A Trends The global economic downturn profoundly influenced M&A activities on an international level in 2023, compounded by geopolitical events, economic
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