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Israel intends to privatize state-owned defense firms Israel Aerospace Industries (IAI) and Rafael Advanced Defense Systems through public offerings on the Tel Aviv Stock Exchange. The government aims to sell 25-30% of each company by 2027 while retaining controlling stakes.

IAI is valued at $20 billion, and Rafael at $10 billion. Recent military conflicts and heightened global military spending have increased interest in Israeli defense technologies. IAI signed a $3.1 billion contract with Germany for the Arrow 3 missile defense system, part of a larger deal potentially exceeding $6.3 billion. Israeli arms exports reached a record $14.8 billion in 2024, with significant contracts to European nations and other nations in the Middle East, including the UAE and Saudi Arabia.