ISRAEL Law and Practice Contributed by: Barak Platt, Micki Shapira, Liron Hacohen and Nataly Margalit, Arnon, Tadmor-Levy
over the past year include the acquisition of Magic Software by Matrix for USD2.2 billion and the acqui - sition of AIM Security by Cato Networks for USD350 million. 1.3 Key Industries A number of industries in Israel continue to experi - ence significant M&A activity in 2025. Cybersecurity remains extremely robust in Israel, and a number of private cyber companies were acquired by overseas market leaders. The most notable transaction in the cyber field that was announced at the beginning of March 2025 was Google’s acquisition of Wiz (a private company whose founders are all Israeli and whose technology is developed in Israel) for USD32 billion, marking Google’s largest-ever acquisition. This was followed in July 2025 by Palo Alto Networks’ USD25 billion acquisition of CyberArk in a cash-and-stock transaction (in which Arnon, Tadmor-Levy represented Palo Alto Networks) that established identity security as a core pillar of Palo Alto’s platform strategy. In con - nection with the closing of the CyberArk acquisition in February 2026, Palo Alto Networks announced its intention to dual-list on the Tel Aviv Stock Exchange, a powerful signal of the deepening integration between global cybersecurity leaders and the Israeli capital markets. Taken together, 2025 marked a watershed year for Israeli tech exits, with a record high in M&A activ - ity across various industries. Beyond cybersecurity, notable billion-dollar transactions included Service - Now’s USD7.75 billion acquisition of Armis (critical infrastructure security), Xero’s USD3 billion acquisition of Melio (fintech payments), Munich Re’s USD2.6 bil - lion acquisition of Next Insurance (insurtech), Thoma Bravo’s USD2 billion acquisition of Verint Systems (AI- driven customer engagement), and Advent’s USD2.5 billion take-private of Sapiens International (insurance software). These transactions, spanning cybersecu - rity, fintech, insurtech and enterprise software, collec - tively underscore the depth of Israeli innovation and the continued appetite of international strategic and financial buyers for Israeli-founded companies. AI companies in Israel have also raised significant amounts of capital and continue to attract acquisi - tion interest from large international buyers. Beyond
technology, Israel’s robust defence, medical device and digital health sectors similarly drew sustained attention from both strategic and financial investors throughout 2025, reflecting the breadth of Israeli inno - vation across industries. With international appetite for Israeli assets showing no signs of abating, and with Israeli companies continuing to demonstrate their capacity to develop category-defining technologies, 2026 is a route to sustain both the volume and scale of M&A activity seen in 2025. Three structures are commonly used to acquire Israeli companies, and each has its own advantages and disadvantages. While tender offers are another poten - tial structure which can be used to acquire all of the issued shares of a public company, they are rarely used, primarily because: • holders of at least 95% of the target company’s issued shares must accept the offer; and • appraisal rights continue for six months following the closing. Share Purchase Agreements 2. Overview of Regulatory Field 2.1 Acquiring a Company Many private Israeli companies are acquired using a share purchase agreement. These transactions are straightforward. The acquirer enters into the agree - ment with the target company and its shareholders who sell their shares in the target company directly to the acquirer. There are meaningful advantages to this structure, for example: • only capital gains tax is payable, and foreign share - holders are often exempt from capital gains taxes in Israel; • the target company’s legal entity remains the same; and • if the circumstances permit, the agreement can provide for a simultaneous sign and close. However, share purchase agreements are not used for all acquisitions of private Israeli companies. This structure is appropriate for transactions in which shareholders holding 100% of the target company’s
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