Energy & Infrastructure M&A 2025 Comparisons

Over the past year, energy and infrastructure M&A activity in Israel has slowed compared to the previous 12 months. The market is still active, but the focus has shifted. Instead of headline acquisitions by foreign investors, most activity has been in project financing and upgrades to existing assets.

A clear example is Dalia Energy’s major financing agreement for ILS5.3 billion (USD1.5 billion) from Bank Hapoalim for the construction of a new 850 MW power plant at Eshkol. Deals like this show that local investors and lenders remain confident in building new capacity, even while large international buyers currently appear more cautious.

Observable Changes

• Inflation eased slightly, making valuations clearer and reducing price uncertainty.
• Financing is available, especially from Israeli banks, though interest rates are still higher than they were a few years ago.
• Geopolitical risks including the conflicts in Gaza and concerns on Israel’s northern border have had the effect of causing some international buyers to be more hesitant. A major planned acquisition involving NewMed Energy was paused for these reasons. This cooling of cross-border investment is the biggest difference from a year ago.

Comparison to the Global Position

• Globally, energy and infrastructure M&A continues to benefit from demand for clean power, grid upgrades and digital development like data centres. While the global market is not booming to the extent it was prior to the 7 October War, it has stayed relatively active.
• Across the Middle East, deal activity has increased (for example, in the UAE and Saudi Arabia). By comparison, Israel is currently performing below both global and regional levels in terms of large M&A deals. However, Israel remains strong in project development and financing and construction is moving ahead even if ownership changes are fewer.

If inflation stays stable and regional risks ease, foreign strategic buyers are likely to re-enter the market. Growth in renewables, power storage, grid improvements and energy supply for data centres is expected to generate new opportunities. Accordingly, Israel is definitely not in a downturn. More correctly, it is in a holding pattern for increased major M&A deals with the market being well positioned for a profitable rebound.

Key Trends

Natural gas

Offshore natural gas remains central to Israel’s energy strategy. Major expansion projects and new export arrangements have reinforced Israel’s role as a regional supplier, for example, an export deal with Egypt (130 billion cubic metres over 15 years). At the same time, temporary shutdowns during the Iranian attacks reminded investors and developers of the need for strong risk planning and system resilience.

Energy storage

Large-scale storage projects have moved from concept to reality. National tenders have awarded significant new capacity, for example, an award to Enlight to deploy large-scale energy storage systems designed to integrate more renewable energy into the grid with total investments estimated at ILS3 billion (USD840 million), thus helping to support the integration of more solar power and reduce pressure on the grid at peak demand times.

Gradual market liberalisation

Electricity market reforms continue to expand consumer choice and enable more private-sector participation. Regulatory updates around tariffs, rooftop solar and private supply agreements mean that businesses must now pay closer attention to pricing structures and negotiation opportunities, as more competitors become suppliers.

Rising demand from data centres and AI growth

The rapid expansion of digital infrastructure and artificial intelligence has put new pressure on electricity planning. Developers and regulators are accelerating work on grid upgrades, flexible capacity and backup solutions to keep pace.

Delays in transport megaprojects

Major urban rail initiatives, including the Tel Aviv Light Rail and Metro projects, have encountered timeline extensions and cost challenges. While all projects remain ongoing and reflect progress, international contractors and financiers have been compelled to reassess risk allocation and delivery models for mega-projects.

Supply chain disruptions

Conflicts in the region and disruptions to shipping through the Red Sea had the effect of increasing costs and delivery times for imported materials. For a period of several months, contractors had to embed explicit protections in project contracts and make accommodations in their budgeting strategies.

Changes in the Business Approach

ESG and climate commitments

Companies continue to align their development pipelines with Israel’s renewable energy goals, including the 2030 emissions-reduction target of 30%. While the regulatory framework for ESG is still developing, international partners increasingly expect climate-aligned standards in project finance and reporting.

A climate bill has made some progress in the Knesset, though it has not yet been fully enacted. In the interim, projects are still framed against the Paris Agreement narratives and storage, grid resilience and gas peaks are preferred when their environmental impact is far less risky.

Risk and flexibility

Force majeure, price adjustment and logistics provisions have become significantly more detailed in new contracts. Developers are also pursuing storage-backed renewable projects and bilateral power agreements to help manage exposure to market volatility, especially since the Israeli government has introduced new provisions that authorise bilateral PPAs between independent power producers and final clients.

Gas and storage in the near term

Investors are directing capital to assets that strengthen reliability: natural gas expansions, hybrid renewable solutions and grid upgrades. Longer-dated transport and interconnection projects remain part of strategic planning but are more sensitive to policy and cost risks.

Looking Ahead

Israel is continuing to balance climate commitments with energy security and unlocking private investment while managing cost and geopolitical pressures.

Despite the uncertainties, the market has shown strong adaptability. The combination of established gas resources, ambitious renewable goals and digital-driven demand means Israel’s energy and infrastructure sector will remain a key investment arena, provided that risk is managed properly, and project planning stays flexible.

How Investors are Entering the Market

• Government tenders and concessions – investors respond to public tenders where the Israeli government invites private companies to build, operate and transfer large assets (such as power plants, desalination facilities or transport infrastructure).
• Joint ventures and local partnerships – a common route is through partnering with a local firm that already has development and operational experience. By teaming up, foreign or new investors can share the risk and comply with threshold requirements when submitting their tender bids.
• Buying existing operational assets – rather than starting from scratch, investors may purchase assets that are already built and running such as solar parks, storage facilities or power plants, from developers who want to recycle their capital.
• Corporate divestments and privatisations – some companies or government-owned entities sell off parts of their infrastructure portfolios. Investors buy these carve-outs or privatised assets.
• Using capital markets and project finance – infrastructure assets are increasingly being financed by institutional investors (for example, pension funds and insurance companies) and via local bond markets, in addition to bank loans. This gives investors multiple ways to structure deals.
• Co-development and flip strategies – some investors join early-stage development partnerships, help fund and build a project, then either hold it for steady income or sell it once it reaches full operation.

Who are the Investors?

• Domestic infrastructure funds – local specialist funds that focus solely on infrastructure and have good relationships in Israel.
• Israeli institutional capital – pension funds, insurance companies and other institutional investors in Israel who provide substantial capital for infrastructure projects.
• Power and utility companies – domestic and international energy companies that develop, own or operate assets in Israel.
• Banks and lenders – traditional banks are still pivotal for project debt, especially in the early years, though newer financing methods are becoming more common.
• International infrastructure funds – global investors who see Israel as a market with potential, either via partnerships, tenders or secondary market assets.

Israel is currently experiencing major growth in energy and infrastructure development. New power stations, solar farms, gas pipelines and regional interconnectors are being planned or built to support rising demand and improve energy security.

Natural Gas

Natural gas remains one of Israel’s primary sources of electricity. Several large projects are focused on increasing gas production and replacing old coal-fired units with modern combined-cycle gas plants, for example:

• Dalia Energy is developing a new 850 MW gas-powered plant, supported by USD1.5 billion financing. This follows earlier expansion at the same site;
• the Katlan offshore gas project is receiving USD1.2 billion in investment, showing continued growth in domestic gas supply; and
• the Leviathan gas field expansion will increase output for both customers in Israel and export markets such as Egypt and Europe.

Gas infrastructure is also being developed to transport more energy to neighbouring countries. This helps Israel strengthen its position as a regional gas hub.

Solar and Battery Storage

Israel has excellent sunlight conditions, allowing for rapid expansion of solar generation facilitating developments, for example:

• a national programme to encourage rooftop solar panel installation, which will add thousands of new small-scale renewable units across cities and towns; and
• large solar megaprojects in the Golan Heights that will inject significant amounts of clean energy into the grid. These large solar farms are increasingly built with battery storage. Storage ensures electricity is available after sunset and helps stabilise the grid as renewable power increases.

Infrastructure Supporting the Energy

Major national infrastructure projects support both conventional and renewable energy, for example:

• expansion plans around major gas fields help to support fuel supply and grow exports;
• upgrading power networks and investing in regional interconnection improves electricity reliability and reduces bottlenecks; and
• energy export pipelines and strategic grid links boost Israel’s economic and geopolitical role in the region.

These examples are ways to ensure that new solar power and flexible gas generation can be efficiently used across the country. In so doing, the phasing out of coal-based energy sources in exchange for solar and gas demonstrates Israel’s growth of renewables aggressively, while still relying on natural gas to guarantee stable power supply, making Israel a highly active market for energy M&A, project finance and construction contracting.

Israel is a practical and efficient location to establish new ventures in energy and infrastructure. Affectionately known as the “Start-Up Nation”, Israel has progressed at an incredibly fast pace towards a more resilient energy future. The government has set ambitious goals for renewable power and monumental infrastructure projects. Accordingly, entrepreneurs looking to invest in solar power, energy storage, micro-grids, infrastructure and other innovative solutions would not be found wanting for opportunities.

Incorporating locally enables companies to make use of government incentives supporting clean energy, grid development and climate-related innovation. It also ensures that investors, regulators, and commercial partners can operate within a familiar legal environment.

Although some founders later choose to form a parent company overseas for tax or global investment reasons, initial incorporation in Israel is generally straightforward: time required for registration is short, the process is digital, and no minimum share capital is required.

Choosing the Right Corporate Vehicle

Most early-stage companies in this sector begin as a private company limited by shares. This protects shareholders from personal liability, supports flexible governance arrangements, and is widely accepted by both domestic and foreign investors.

As a company’s ambitions expand, for example, when it intends to own large renewable projects or raise substantial finance, alternative structures may be needed. If the business aims for a stock exchange listing or major institutional investment, converting to a public company becomes relevant. For developers building specific assets like solar facilities, energy storage systems, or infrastructure concessions, establishing a separate special-purpose company for each project helps limit risks and satisfy lender requirements. Limited partnerships are also used, though they are less common for technology-driven start-ups.

Securing Initial Investment

At the early stage, funding usually comes from a combination of private investors and public support programmes. Angel investors, family offices and individuals with industry experience are often the first backers. Alongside this private capital, the Israel Innovation Authority and other government-supported initiatives may provide grants or pilot programme support, which is particularly important in regulated markets such as electricity and infrastructure.

These early investments are first documented in a short-term sheet recording the main commercial terms. Once agreed, the parties sign more detailed agreements (typically a shareholders’ agreement and a subscription agreement) which set out the as-of-yet undefined provisions with an emphasis on founder responsibilities and investor protections.

Scaling Through Venture Capital

When the business demonstrates market readiness or global potential, venture capital becomes more significant. Funds based in Israel as well as international investors are active in areas including renewable-energy technologies, energy storage, advanced power-grid tools and infrastructure solutions.

As funding rounds grow, companies frequently restructure operations to suit investor and lender expectations. For example, they may create subsidiaries dedicated to individual infrastructure assets so that financing and licensing can be managed more efficiently.

Legal Documentation and Governance Practices

The contractual structure used in Israeli venture financing follows widely recognised international practice. Many documents are adapted from models used in major global markets, ensuring that rights and obligations are clear and that investors receive familiar protections. These typically include liquidation preferences, anti-dilution rights, director appointments and decision-making controls, as well as vesting of founder equity to support long-term commitment.

The objective is to maintain a balance that protects investment while allowing the company to operate effectively within a regulated and technically complex sector.

Structural Adjustments as the Business Grows

As companies move from early-stage development to substantial project execution, their corporate frameworks are likely to evolve. A transition to public-company status may be considered to access the capital markets. New subsidiaries may be set up to isolate regulatory and financial risks for each project. For companies raising funds globally or scaling operations outside Israel, the creation of a foreign holding company may also be considered.

These changes are generally timed to align with new financing requirements, participation in government tenders or large-scale infrastructure commitments.

In Israel, companies in energy, infrastructure or related technologies most often see liquidity through:

• acquisition by a strategic buyer – a larger company (eg, an infrastructure developer, energy company, utility, or major technology player) purchases the start-up. This is frequently the earliest realistic exit path;
• sale of shares in a secondary transaction – existing shareholders (founders, early investors, employees) may sell their shares to new or existing investors. This can happen even while the company remains privately held. For instance, secondaries are becoming more common in the Israeli venture ecosystem.
• initial public offering (IPO) or listing on a stock exchange – this is less common in early‐stage energy/infrastructure companies, but if the company grows substantially (multiple projects, significant revenues, regulatory maturity), a listing becomes feasible;
• merger or reverse takeover – particularly in infrastructure, a merger with another entity or reverse merger into a listed vehicle may provide exit paths;
• dividends or distribution from project vehicles – in infrastructure vehicles (eg, SPVs owning a solar farm), investors may realise liquidity via dividends or sale of the project entity rather than share sale of the parent company; and
• liquidation or wind‐down – the less desirable outcome: if the business fails or cannot secure further funding, assets may be sold, or the company may be wound-up and shareholders receive residual value (which may be nil).

Considerations for Founders and Investors

Timing

• Founders should set realistic expectations – in Israel many companies take five to ten years (and sometimes more) to reach a meaningful exit.
• Investors should assess the liquidity horizon – longer holding periods are the norm and liquidity tools (secondaries, continuation vehicles) are increasingly relevant.
• For infrastructure/energy ventures the scale often is much larger, regulatory/licensing cycles longer, so exit may take yet longer than typical tech companies.

Investment documents

• Ensure that shareholder agreements, subscription agreements and articles/by‐laws include clear terms around exit rights, drag‐along/tag‐along rights, redemption rights, conversion rights, etc.
• Founders should understand vesting, founder protections, and how exit events trigger (or fail to trigger) acceleration of equity vesting.
• Investors should have clarity on how their shares convert in an exit (preferred versus ordinary shares), how proceeds are distributed, and whether there are any obstacles (for example, minority rights, regulatory approvals).

Valuation and exit terms

• Valuation at exit (or secondary sale) must be aligned with earlier rounds and topics such as dilution, anti‐dilution rights, participation rights of preferred shares will become increasingly relevant.
• Founders should be clear on what “liquidity” means: a sale of some shares may not mean full exit for founders as they may retain shareholding in the buyer or hold shares that have not yet become accessible.
• Investors should be aware of any exit that carries “earn-outs” or deferred payments – common in infrastructure deals where regulatory approvals or project commissions determine value.

Regulatory and licensing

• In energy/infrastructure ventures, exit value often depends on successful licences, government approvals and regulatory changes. Accordingly, the company should be structurally ready for sale, having obtained clear permits.
• Due diligence on regulatory risk should be fully undertaken and completed prior to exit.
• Exit may be delayed or value reduced if licensing is incomplete or contingent obligations remain.

Tax and cross‐border issues

• Founders and investors must consider Israeli tax implications on exit (such as capital gains tax, withholding, repatriation of proceeds).
• If the company or holding company is foreign, cross‐border tax treaties, withholding, currency conversion and exit structure become significantly more important.
• Secondary sales may trigger complex tax implications for founders and employees (especially if members have foreign residences or relocation is required).
• Equity plans for employees should anticipate exit: vesting, tax timing, and potential local, as opposed to foreign, tax exposure.

Spin-offs are not common in Israel’s energy and infrastructure market. These deals can be expensive and legally complex, and they may involve many regulatory approvals. Still, companies sometimes use spin-offs when they want to change strategy or focus on core activities.

In Israel, major energy and infrastructure groups are more likely to restructure by selling assets, forming joint ventures or attracting new investors into specific projects. That said, spin-offs do occur when there are strong business reasons.

Common reasons to consider a spin-off in Israel include:

• focusing the business on main activities (for example, renewable energy or transport infrastructure);
• responding to regulatory requirements (such as separation between electricity transmission, distribution and supply);
• helping investors better understand the value of specific assets;
• raising financing for new growth and innovation;
• preparing the business for a future merger or sale; and
• simplifying financial and risk structures.

Israeli spin-offs are usually planned so that they do not create unexpected tax liabilities. Israel’s tax rules allow for tax-neutral reorganisations if certain conditions are met. These rules are mainly found in the Income Tax Ordinance, which deals with company splits and asset transfers.

To qualify for tax relief, the transaction must follow strict requirements, such as:

• having a real commercial purpose which is not only tax savings;
• keeping the same shareholders in the separated businesses for a required period; and
• avoiding cash or other non-qualifying assets being transferred as part of the split.

If these conditions are not met, the spin-off could trigger taxes for both the company and its shareholders.

A spin-off can be followed by a merger or sale in Israel, but this may make the completion thereof more complicated. Regulators are likely to scrutinise the spin-off in order to ensure that the separation was not done only to avoid taxes.

In order to avoid unnecessary scrutiny in such circumstances:

• the business purpose must be clear and well-documented;
• the approvals from shareholders, boards, lenders and possibly government bodies must be secured; and
• if the deal involves large energy or infrastructure assets, approvals that are likely to be needed should be sought in advance from a variety of regulatory bodies including, inter alia, the Israel Competition Authority, the Ministry of Energy and Infrastructure and the Israeli Securities Authority, if a public company is involved.

Timing is of importance because if the merger or sale happens too soon after the spin-off, tax relief may be denied. Therefore, before completing a spin-off, parties would be advised to consult the Israel Tax Authority and request a confirmation that the planned structure qualifies for tax relief. This is usually done by requesting a pre-ruling which will serve as a binding confirmation on how the tax law will apply) and assurances that anti-avoidance rules (ie, suspecting that the spin-off was done for the incorrect reasons) will not apply.

The ruling process can take several weeks or longer, depending on the complexity of the deal.

Buying shares in a publicly listed Israeli company before launching a takeover bid can sometimes provide strategic benefits, such as:

• buying shares at a price lower than the future offer price;
• signalling serious intention to acquire the company; and
• making it harder for another buyer to step in.

However, bidders must consider the following.

• Disclosure duties – any holding of 5% or more of a listed company must be reported publicly. Any change of 1% or more must also be reported. Once a takeover intention becomes public, any share dealing must be disclosed.
• Approval thresholds – if the deal requires shareholder approval (often the case in energy or infrastructure due to special regulatory approvals), shares already owned by the bidder might not count toward the approval vote.
• “Special tender offer” triggers – buying shares above certain percentages can trigger Israel’s special tender offer rules unless the buyer already has board and shareholder approval.
• Insider trading rules – if the bidder buys shares while holding non-public price-sensitive information, this may be viewed as insider trading under the Israeli Securities Law.
• Price rules – in many cases, share purchases set a minimum price for the tender offer.

Owing to the presence of these issues, many buyers prefer to avoid stake-building before the formal offer.

Israel does not have a mandatory offer. Instead, there is the special tender offer rule.

• A buyer who crosses 25% or 45% control thresholds (without already having a majority) must make a tender offer to all shareholders.
• The offer must allow other shareholders to sell their shares at a fair price.
• The offer is approved only if a majority of the shareholders who have no personal interest in the deal vote in favour (excluding the bidder and related parties).

If the buyer already has more than 50%, no special tender offer is required.

Public company acquisitions in Israel are primarily carried out through:

• tender offers – a buyer offers to purchase shares directly from all shareholders. The buyer may aim for more than 50% for basic control, or 95% to squeeze out the remainder.
• mergers – this requires compliance with statutory requirements such as:
1. approval by the board of both companies;
2. approval by the shareholders (usually a simple majority, but sometimes special majorities); and
3. waiting periods and creditor protections.

Friendly deals are far more common than hostile takeovers which may be more prevalent in other jurisdictions.

Offers may be made up of:

• all cash;
• shares in the bidder company; or
• a mix of cash and shares.

If the bidder bought shares in recent months at a higher price, that price may set the minimum price for the offer. Cash is more common in Israel, especially in regulated industries like energy and infrastructure.

Contingent payments (such as those based on project approvals or litigation outcomes) are possible but less common.

Typical conditions for takeovers include:

• regulatory approvals which are likely to be required from, inter alia:
1. Israel Securities Authority (ISA);
2. competition commissioner; and
3. relevant government ministries (for example, the Energy Ministry, the Defence Ministry etc);
• available financing; and
• no major adverse change in the target company.

It is important to ensure that conditions are not vague or fully under the bidder’s control.

It is customary in Israel to enter into a transaction agreement in friendly public takeovers, such as mergers or recommended tender offers. These agreements focus on practical co-operation where the target assists the bidder with due diligence, prepares regulatory filings, provides required information, and keeps the business running normally until completion. The board typically undertakes to recommend the transaction to shareholders, but this promise is always subject to its fiduciary duties. Practically, that means that the board must consider a better offer if one appears.

The scope of commitments that a public target may take on is intentionally limited, because Israeli law places strong emphasis on minority shareholder protection. Measures that would improperly block competing bids are generally unfavourable and may be challenged. Break fees can be used, but they must be modest (commonly below 1% of deal value) and proportionate so they do not deter alternative proposals. Rights for the bidder to match a superior offer are sometimes included, but even those must allow the board flexibility if circumstances change.

Regarding representations and warranties, Israeli public companies typically provide minimal and essential assurances. These normally deal with main issues such as due incorporation and authority, compliance with securities reporting obligations, and accuracy of public disclosures. In regulated infrastructure sectors such as energy, additional statements relating to licences and regulatory approvals may also be included. However, broad commercial warranties, future performance guarantees, and indemnities which are more common in private M&A, are usually not given by a public target, because its shareholders are not acting as traditional sellers and cannot fairly bear future liabilities. Instead, bidders rely primarily on their own due diligence, the public reporting regime and closing conditions tied to regulatory approvals or material changes.

In Israel, tender offers usually require a minimum level of shareholder acceptance to allow for the bidder to actually gain control in accordance with the Israeli Companies Law. Key legal thresholds are 25% and 45% of the voting rights, which trigger special tender offer rules, and more than 90%, which triggers a full tender offer aimed at acquiring all shares.

A special tender offer must be approved by a majority of shareholders who are not personally interested in the deal, while a full tender offer normally succeeds if very few shares remain outside the offer (typically less than 5%, or less than 2% in some cases). These rules are designed to protect minority shareholders, prevent creeping takeovers, and ensure transparency when control of a public company changes hands.

If a bidder reaches 95% tender acceptance, it can force the remaining 5% to sell their shares (“squeeze-out”) at the offer price.

If the 95% level is not reached, the minority shareholders stay on and the company continues to operate as a public company unless de-listing rules are satisfied.

In Israel, there is no formal “certain funds” requirement like in some other jurisdictions, but the bidder must demonstrate that it has reliable and sufficient financing before launching a tender offer or merger. Practically, this means financing arrangements are made at announcement, and the buyer (not the financing banks) is the party making the offer.

Generally speaking, a takeover offer cannot be conditional solely on obtaining financing, as this would create uncertainty and risk to minority shareholders. That said, however, closing can be subject to conditions including, inter alia, regulatory approvals and no material adverse change. Buyers therefore secure committed financing upfront to avoid the offer being blocked or viewed as non-credible by the Israel Securities Authority or the target board.

In Israel, a target company can agree to limited deal protections, such as giving the bidder access to information, agreeing to keep running the business normally, and in some cases a reasonable no-shop or matching right so the bidder can respond to a better offer. Break-up fees are allowed only if they are limited and not harmful to minority shareholders, while reverse break fees (where the bidder pays) are more common. Strong defensive measures like poison pills or force-the-vote requirements are generally not used and may be challenged under Israeli law because these measures, while common in other jurisdictions, are viewed as inconsistent with directors’ duties to protect all shareholders, especially minorities.

In Israel, there are no domination or profit-sharing arrangements like in some other jurisdictions. Governance rights depend on the percentage of voting rights obtained:

• with over 50%, the bidder gains control of the board and day-to-day decision-making;
• with 75% or more, the bidder can approve major corporate actions such as amending articles of association or restructuring; and
• once 95% is reached, the bidder can de-list the company and squeeze out the remaining shareholders.

Any additional governance rights would normally come through negotiated agreements or board appointments and may require regulatory approvals in specific sectors which include energy and infrastructure.

In Israel, it is common for a bidder to seek irrevocable commitments from major shareholders and directors to support or tender into the transaction, especially in friendly deals.

These undertakings are usually limited and often include an “out” that allows the shareholder to withdraw the commitment if a better offer comes about, consistent with fiduciary duties and minority shareholder protections.

To demonstrate by way of example, if a principal shareholder holding 18% of the target company signs an agreement with the bidder in which it promises to accept the tender offer for all their shares, not to sell those shares to anyone else before the offer closes and to co-operate with providing required information etc, this commitment does not preclude an “out” that would allow the shareholder to withdraw the commitment if a better offer is made that is at least x% higher in value, or the target board changes its recommendation after concluding it must do so to fulfil its legal duties.

The tender offer documents must be filed with the ISA and the Tel Aviv Stock Exchange (TASE), but formal pre-approval of the offer price or terms is generally not required. The ISA reviews the disclosure to ensure, inter alia, accuracy and fairness and may request clarifications or amendments.

The timing depends on the complexity of the transaction, but the process usually takes a few weeks. If the offer includes share consideration, a prospectus must be approved by the ISA, which can take longer.

The tender offer timeline is set by the Securities Regulations (usually 21–35 days), rather than by the regulator’s discretion. If a competing offer is launched, the timetable may be extended to allow shareholders a fair opportunity to consider both offers, and the first bidder generally has the discretion to adjust its terms or withdraw its offer.

A final deadline is usually included in the merger or takeover agreement to avoid prolonged uncertainty. By that date, all required conditions (such as regulatory approvals) must be completed. If the deal is not finished by the long-stop date, either party can usually walk away without penalty.

A tender offer can be extended if it cannot be completed because regulatory approvals are still pending, but the extension must comply with the statutory timelines (see 4.13 Securities Regulator’s or Stock Exchange Process) and be clearly disclosed to the market. The bidder will generally keep the offer open until approvals are received, provided that the delay is for legitimate regulatory reasons. The Israel Securities Authority may require updated disclosures if the process becomes lengthy.

It is common practice to begin the regulatory approval process after the deal is announced but before the offer closes, and some approvals often progress before the formal launch of the tender period. In sensitive sectors like energy and infrastructure which may require approvals from various authorities, bidders usually engage regulators early to avoid timing issues and reduce execution risk.

Privately held companies in Israel are most commonly acquired through share purchases, where buyers acquire shares directly from existing shareholders, or through asset purchases when the buyer wants selected assets without assuming wider liabilities.

Statutory mergers under the Israeli Companies Law are also used when tax or operational efficiencies justify a more formal combination. In such circumstances, extensive due diligence across financial, legal, employment, tax, IP and data compliance areas, securing any required regulatory approvals (such as from the Israel Competition Authority or sector-specific regulators), and complying with shareholder rights in the Articles of Association and shareholders’ agreements, is paramount.

Employee rights are a major focus owing to strict Israeli labour law around continuity of employment, accrued benefits, and pension/severance liabilities. There is usually a need for tax restructuring, and in more complex cases, buyers may seek advance rulings from the Israeli Tax Authority.

Clearly worded representations, warranties and indemnity protections are vital to mitigate risks following the closing.

Establishing and operating a new company in the energy and infrastructure sector in Israel is subject to specific regulations.

Regulatory Bodies

Depending on the nature of the project, the main regulators or ministries that will need to be engaged are likely to include the following:

• Ministry of Energy and Infrastructure (MOE);
• Electricity Authority (also “PUA for Electricity”);
• Noga – Israel Independent System Operator Ltd (IS Operator);
• Standards Institution of Israel (SII) and other technical / environmental regulators; and
• if foreign investment or critical infrastructure is involved – the Advisory Committee for Evaluating National Security Aspects of Foreign Investments may also need to be consulted.

Timeframes for Permits and Approvals

While there is no single standard timeframe that applies across every type of new company in the energy and infrastructure sectors, industry norms and practical experience indicates as follows.

• According to a recent audit by the State Controller’s Office of Israel, for a conventional power plant (fossil-fuel based) the time from initiating the planning institution approval process (under land-use planning authorities) through to operation was between approximately six-to-eight years or more.
• For renewable-energy production licences – once the requirements are satisfied (ie, construction has been completed) a production licence is issued for 24 years 11 months.
• Oil and gas licensing – a recent round of exploration licences were awarded by the Ministry of Energy in 2025, but the process from bid to award spans multiple stages (pre-qualification, evaluation, award) and tends to run over many months to years.

For M&A transactions in the energy and infrastructure sectors in Israel, the primary securities market regulator is the ISA.

That said, there are additional regulatory bodies to be aware of including, inter alia:

• the Israel Competition Authority (ICA) which oversees merger control and competition law issues under the Economic Competition Law, 5748 1988; and
• sector-specific regulators may also apply (for example, energy-licensing bodies for infrastructure or power plants) depending on the assets involved such as:
1. the MOE – responsible for energy policy for electricity, fuel, natural gas, renewables and infrastructure;
2. the Israel Public Utility Authority for Electricity (Electricity Authority) – regulates the electricity market;
3. the Natural Gas Authority (within the MOE) – regulates the natural gas transmission, distribution and licensing in the gas sector; and
4. the Ministry of Environmental Protection – plays a role when infrastructure or energy projects execution would have an environmental impact.

Israel does not have a single foreign investment statute with mandatory notification requirements that pertains to all sectors. Instead, a national security review is carried out based on sector-specific and risk bases. The government has established the Advisory Committee for Evaluating National Security Aspects of Foreign Investments, which co-ordinates screening of foreign investors in transactions involving significant national infrastructure as well as in other sensitive industries.

Where the target operates in a regulated sector of national importance (of which most energy and infrastructure projects form a part), prior approval from the competent ministry or regulator may be required as a condition to closing. In those situations, the review is effectively suspensory until clearance is granted, and non-compliance can result in the transaction, licensing or other actions being barred.

National Security Review

Israel does not operate a single, comprehensive foreign investment screening statute. Instead, national security concerns are addressed through a ministerial review mechanism. The Advisory Committee for Evaluating National Security Aspects of Foreign Investments assesses proposed investments in critical infrastructure and specific technology sectors, regardless of whether the acquirer is foreign or domestic.

Review may be required in the following circumstances, inter alia:

• the target operates essential services or infrastructure (for example, power transmission, natural gas transportation, water systems, defence-related technology or cybersecurity services);
• the investment grants governance, information or access rights enabling the investor to influence strategic assets; or
• the investor has ties to a foreign government, operates in a hostile jurisdiction or otherwise raises national security sensitivities.

Sector-specific regulatory frameworks can require authorisation prior to closing and allow the government to block, unwind or impose conditions on transactions that create security risks. Public interest considerations may also arise in cases involving state-owned or formerly state-owned enterprises governed by the Government Companies Law.

Foreign investors in the energy and infrastructure sectors should consult with the relevant regulator or ministry to confirm whether national security review applies and to incorporate any conditions into their transaction documents.

Export Control

Israel maintains an established export control regime and maintains commitments to various multilateral control arrangements, including the Wassenaar Arrangement, the Missile Technology Control Regime, and the Australia Group. Export controls apply to defence items, dual-use technologies and cybersecurity products, as well as certain chemicals, biological agents and other controlled materials.

Relevant regulatory authorities include, inter alia:

• the Ministry of Defence – DECA (Defence Export Control Agency), which administers export licences for defence and dual-use items;
• the Ministry of Economy and Industry, which oversees economic sanctions; and
• customs and law-enforcement bodies, which carry out monitoring and enforcement.

Exporting controlled items without a valid licence can constitute a criminal offence and expose companies to civil and regulatory penalties. Brokering, technical assistance and intangible transfers of controlled technology (including software and data) may also require licensing. Export controls frequently intersect with sanctions regimes and may require co-ordinated compliance for businesses operating in sensitive jurisdictions.

Merger control in Israel is governed by the Economic Competition Law, 1988, and administered by the ICA. Unlike other jurisdictions which have a voluntary regime, Israel has a mandatory pre-closing notification and approval system. A transaction may not be completed until merger approval is obtained if any of the statutory thresholds are met.

Approval must be obtained where one or more of the following apply:

• the merging parties’ combined market share exceeds 50% in any relevant market in Israel;
• at least two of the parties have substantial turnover in Israel above statutory financial thresholds (updated periodically by the ICA); or
• one of the parties has a monopoly position (market share exceeding 50%) in any market in Israel, regardless of whether that market is directly involved in the merger.

The ICA is empowered to block, conditionally approve, or impose remedies on transactions that may significantly harm competition. In certain cases, the ICA may also review arrangements that may fall outside the defined thresholds where competition concerns are identified.

Parties in regulated sectors (of which energy and infrastructure form a part) may also be subject to additional approvals from sector-specific regulators or ministries, particularly where the transaction affects critical infrastructure or market structure. Albeit not a requirement, it is common for parties to consult with the ICA at an early stage to refine market definitions and assess potential competition concerns.

Israel has a highly protective labour law system with strong statutory rights for employees and an established role for trade unions, particularly in large enterprises and historically state-owned infrastructure companies. Collective bargaining agreements may apply at the sectoral level and, where in force, can significantly influence terms of employment.

Additionally, Israeli law requires that when a business is transferred as a going concern, employees generally continue their employment with the acquiring entity without interruption, and their accrued rights (such as seniority-based entitlements, pension rights and severance pay) are preserved. Changes to terms and conditions following the transfer are subject to statutory protections and, where a collective bargaining agreement applies, to negotiations with the relevant union.

Where unionised workplaces are involved (in respect of which the energy, infrastructure and transport sectors are indeed relevant), acquiring companies may need to conduct consultations with employee representatives before implementing structural or operational changes.

Changes in the workforce, including dismissals or harmonisation of employment terms, must comply with statutory procedures and good faith bargaining requirements, and may require engagement with government agencies such as the Commissioner of Labour Relations.

Israel does not impose currency control restrictions on M&A transactions and does not require central bank approval for foreign exchange activities. Generally speaking, funds may be freely transferred into and out of Israel, subject to compliance with anti-money laundering regulations, tax and sanctions regulations administered through the Bank of Israel and other regulatory authorities (if applicable in accordance with the specific case).

In Sun-Flower (et al) v Kingdom of Spain (Tel-Aviv District Court, 25 August/1 September 2025) the court refused to enforce an award issued by the International Centre for Settlement of Investment Disputes (ICSID) on the basis of the Energy Charter Treaty against Spain, citing (among other things) the lack of a sufficient Israeli nexus.

This appears to be the first Israeli ruling on ICSID award enforcement, and it established that a better-suited location (one that has a stronger legal connection) should be utilised for enforcing energy awards unless attachable assets or stronger local connections exist. As a result of the decision, it is precedent now that winning an ICSID case does not guarantee that the successful party can collect money in Israel.

For relevant parties seeking to engage Israeli energy or infrastructure M&A deals, the ruling affects judgment enforcement risk and forum strategy in cross-border deals.

Renewable Energy – Significant Recent Developments

The following constitutes non-exhaustive examples.

• A major regulatory move approved by the Planning Administration in collaboration with the Ministry of Energy and Infrastructure has been introduced that seeks to implement that all new buildings (residential and non-residential) in Israel must install rooftop solar systems from December 2025. The regulation is expected to add nearly 3.5 GW of solar PV capacity by 2040, enough to power around 550,000 households annually.
• An example of regulatory reform was brought about by the Public Utilities Authority – Electricity (PUA) in April 2022, when it launched its first competitive procedure for renewable generation, in accordance with which tariffs are now set pursuant to a tender rather than by fixed feed-in tariffs.

Political and Regulatory Objectives and Support for Carbon-Emissions Reduction

• Israel has set a target to have about 30% of its electricity generated from renewables by 2030.
• The push is driven by climate concerns, being less dependent on imported fuels, and economic opportunities.
• There is an increase in regulatory support, for example, tariffs specifically for solar and storage facilities were introduced in 2023 to encourage storage alongside PV.
• The government is encouraging rooftop solar and micro-generation so citizens and businesses become producers (“prosumers”), not just consumers.

Incentive Schemes

• A supplementary tariff for solar with storage installations was introduced in 2023 (top-up payment for PV and battery systems) to help integrate renewables into the grid.
• Regarding rooftop solar, there are net-metering/sell-back schemes in accordance with which the ministry is planning new tariff tracks (for example, a higher rate for the first five years and then a lower rate thereafter) for residential houses with excess power to be sold to the grid.
• There is government support for energy efficiency and renewable projects on public buildings. For example, in 2023, NIS100 million was set aside to be used over two years for more than 70 renewable efficiency projects in government properties.

Conventional Energy Sources – Political and Regulatory Developments

• Coal phase-out – Israel has committed to phasing out coal-fired power generation. According to the Powering Past Coal Alliance listing, Israel aims to have a coal-free electricity sector by 2030.
• Natural gas expansion – Israel is encouraging exploration and production of offshore natural gas reserves (for example, the Leviathan gas field in the Mediterranean) and increasing exports of gas to neighbouring countries.
• Regulatory oversight – the Petroleum Commissioner and Ministry of Energy have updated policies regarding exploration, production and export of conventional fossil fuels.
• Export policy – the government approved higher export volumes of natural gas in 2024 to strengthen economic and diplomatic ties and energy security.

The scope of due diligence in public company acquisitions is generally more limited than in private deals and is primarily confirmatory in nature. Practically, it verifies information already disclosed through the company’s public filings. Public companies are subject to the Israeli Securities Law, 1968, and the Securities Regulations (Periodic and Immediate Reports), 1970, which require extensive disclosure to the ISA and the TASE. Consequently, bidders rely mainly on these public disclosures for their review.

In contrast, due diligence in private company acquisitions is generally broader and may include reviews of corporate, contractual, financial, regulatory and environmental matters. In the energy and infrastructure sector, bidders commonly focus on project risks including concession rights, government approvals, environmental permits, grid-connection arrangements, and financing documentation.

There is no statutory obligation for a public company to provide identical information to all potential bidders in a takeover or acquisition context. However, Israeli securities and corporate governance rules impose practical and fiduciary limits on selective disclosure and board discretion during due diligence.

Under the Israeli Securities Law, 1968, a company must ensure that any material, non-public information (“inside information”) is not disclosed selectively. If such information is provided to one bidder, the company must immediately disclose it publicly through a TASE filing to avoid violating insider trading prohibitions.

Therefore, a company may provide non-material or confirmatory information selectively to one bidder under confidentiality but if the information could influence the price of the company’s securities, in such circumstances, it must be disclosed not just to competing bidders, but also to all investors.

In practice, Israeli public companies tend to limit the scope of due diligence and confine it to data already available in public reports or to information that is clearly non-material.

The board of directors has wide discretion to determine:

• what level of due diligence to allow; and
• which bidder(s) will be given access to non-public information,

provided it acts in good faith and for the company’s best interests (Companies Law, 1999, Sections 11–12 and 252–254).

The board must balance the need to maximise shareholder value (by facilitating a competitive bidding process) against the risks of leaking sensitive information or violating confidentiality obligations.

In transactions involving regulated entities (such as energy licensees, electricity producers, or infrastructure concessionaires), the board often must also consider regulatory confidentiality and Ministry of Energy or Electricity Authority restrictions.

In Israel, several legal and regulatory restrictions may limit the scope of due diligence for energy and infrastructure companies including, inter alia, the following.

• Regulatory and licensing limits – energy projects are often governed by licenses or concessions issued by the Ministry of Energy, Electricity Authority or Natural Gas Authority. These generally contain confidentiality clauses restricting disclosure of technical, operational or financial data without regulator consent.
• Security and strategic infrastructure – projects that are considered to be strategic assets (for example, power plants, ports or gas networks) may be subject to national security clearance requirements. Disclosure of sensitive information may require prior approval from the National Security Council or the Foreign Investment Advisory Committee.
• Environmental and planning data – under the Planning and Building Law, 1965 and environmental legislation, some environmental information is publicly accessible, but detailed assessments and monitoring data often require Freedom of Information requests or regulator approval before sharing.
• Data privacy – the Protection of Privacy Law, 1981 restricts the transfer of personal employee or customer data. Only essential, anonymous, or consent-based data may be shared, and transfers abroad must comply with the Transfer of Data Abroad Regulations, 2001.
• Securities and confidentiality rules – for public companies, the Securities Law, 1968 and TASE regulations prohibit selective disclosure of inside information. Any material non-public information provided to a bidder must be publicly reported, effectively limiting the depth of due diligence.

In Israel, a bid needs to be made public when it reaches a stage where it could materially affect investors’ decisions or the market price of the company’s shares.

The requirement to make a bid public arises under the Israeli Securities Law, 1968, the Companies Regulations (Tender Offer), 2000 and the TASE Rules. This legislation aims to ensure transparency and protect investors by requiring disclosure of material information. Specific rules apply to the disclosures including, inter alia, the following.

• Timing of disclosure:
1. a public company must report any material development immediately that could reasonably affect its share price or investors’ decisions. This includes the start of serious negotiations regarding a takeover, merger or acquisition of control, even before a binding agreement is signed, especially if there are rumours, market speculation or abnormal trading activity; and
2. once a firm intention to make an offer exists (for example, when a bidder delivers a formal proposal to the target’s board), the target company must make an immediate public report through the Magna system (the ISA’s online disclosure platform).
• Form of disclosure:
1. the disclosure is required to be made via a current report (Immediate Report) filed by the target or bidder, summarising the key details of the bid, including the bidder’s identity, the offer terms and any conditions attached;
2. the bid constitutes a Special Tender Offer (crossing 45% ownership) or a Full Tender Offer (crossing 90%), a formal tender offer document must be published to all shareholders and filed with the ISA and the TASE; and
3. the ISA can require immediate clarification or additional disclosure if information is incomplete or market activity suggests inside information has leaked.

The issuance of securities in connection with a takeover or merger may trigger prospectus requirements under the Israeli Securities Law, 1968, unless a statutory exemption applies.

When a public company offers its shares or other securities to the public, it must file a prospectus approved by the ISA. In a stock-for-stock acquisition (where the consideration consists of the bidder’s shares), this would generally be considered a public offer unless the transaction qualifies for an exemption.

Several exemptions from the prospectus requirement are commonly used in takeover or merger transactions:

• private offer exemption – if the shares are offered to no more than 35 offerees (excluding qualified investors), and there is no public marketing;
• merger exemption – if the offer is made as part of a merger approved under the Israeli Companies Law, 1999, the exchange of shares is treated as a corporate restructuring, not a public offer; and
• qualified investor exemption – if the offer is limited to institutional or qualified investors as defined by ISA regulations.

In practice, most Israeli mergers and acquisitions involving public companies are structured either as a court-approved merger or a statutory tender offer, both of which typically fall within these exemptions. Therefore, a prospectus is rarely required, provided no separate public offering or fundraising accompanies the transaction.

The ISA reviews whether the transaction structure properly relies on an exemption and may require a simplified report or disclosure document (such as a merger report or immediate report) to ensure that investors receive sufficient information.

While there is no legal requirement that a bidder’s shares be listed on a specified exchange, either in Israel or abroad, in order to proceed with a takeover, merger or share-for-share acquisition, the listing status of the bidder’s shares affects the disclosure obligations, regulatory review and the form of consideration that can be offered.

Bidders are required to provide financial statements in tender offer or merger disclosures that demonstrate financial capacity and allow shareholders to assess the consideration offered. Financials must be prepared under IFRS (or US GAAP for foreign issuers) and audited. Full pro forma statements are not mandatory unless the transaction significantly changes the bidder’s financial structure or results in a new listed entity.

Bidders are required to provide sufficient financial disclosure to allow shareholders and the market to assess the bidder’s financial condition and the fairness of the offer but the formality and extent of the required financial statements depend on the type of transaction (cash versus stock-for-stock) and the listing status of the bidder. Accordingly, transaction documents themselves are not always required to be filed in full, but summaries and key terms must be disclosed in tender offer reports, merger filings or related-party transaction notices. The ISA may request the full text where necessary for investor protection or regulatory review.

Full filing is common in instances involving related-party transactions and public mergers, while confidentiality protections can be applied to sensitive information. The ISA may permit the redaction of commercially sensitive information (such as pricing formulas or trade secrets) upon request, provided the omission does not mislead investors. Sensitive appendices (like financing schedules or technical contracts) are sometimes filed in camera with the ISA.

The duties of directors in Israel are mainly set out in accordance with the provisions of the Companies Law, 5759-1999, and related case law. The principal statutory duties include:

• duty of loyalty – to act in good faith and for the benefit of the company, to avoid conflicts between the director’s personal interests and those of the company, and to refrain from exploiting corporate opportunities or information for personal benefit;
• duty of care – to act with the level of care that a reasonable director would exercise under similar circumstances, applying both objective and subjective standards based on the director’s knowledge and experience;
• duty to act within authority – to act within the powers granted by law and the company’s Articles of Association; and
• duty of disclosure – to disclose to the board or audit committee any personal interest in a transaction and to obtain corporate approvals where required.

Unlike other jurisdictions, the Israeli Companies Law expressly provides that directors owe their duties to the company, not to individual shareholders, creditors or employees. However, directors must also consider the company’s long-term interests, the fair treatment of shareholders and the protection of minority shareholders as enshrined in Chapter 5 of the Companies Law.

It is relatively common for boards to establish ad hoc committees when considering related-party transactions, mergers or control changes, particularly where conflicts of interest may arise.

• For example, under Section 270(4) and Sections 275–278 of the Companies Law, an independent committee or audit committee must review specific transactions or merger proposals involving a controlling shareholder who is also an interested party.
• In transactions involving management participation (eg, a management buyout), the board may delegate negotiations to a sub-committee composed of independent or external directors to ensure objectivity.

In order to ensure that no conflict of interest occurs, these committees in public companies often co-ordinate with external legal and financial advisers to ensure that the board’s approval process complies with the Israel Securities Authority and Tel Aviv Stock Exchange disclosure standards.

In M&A transactions, the board of directors bears the primary responsibility for overseeing and approving the process. This means that, inter alia:

• negotiations are usually handled by senior executives, but the board must ensure that it has received adequate information, valuation opinions, and legal advice to make an informed decision;
• in public companies, the board’s resolutions and reasoning must be disclosed in the merger report or immediate report filed under the Securities Regulations (Periodic and Immediate Reports), 1970; and
• where a controlling shareholder is involved, approval by a majority of minority shareholders is required under Section 275 of the Companies Law.

Shareholder litigation in Israel, while not frequent, is possible through derivative actions and class actions under the Companies Law and the Class Actions Law, 2006, especially where directors are alleged to have breached their duties of loyalty or care. To that end, buyers should be aware of the following when acquiring a company that may be exposed to shareholder, derivative or class action litigation.

• Scope of directors’ and officers’ (D&O) liability:
1. under Israeli law, directors and officers can be personally liable for breaches of the duty of loyalty or duty of care under the Companies Law, 1999; and
2. buyers should review the target’s D&O insurance policy and any indemnification or exemption provisions in the articles of association to assess coverage limits and exclusions, especially for acts involving bad faith or gross negligence.
• Due diligence on pending or threatened litigation:
1. conduct thorough legal due diligence to identify any existing derivative or class action proceedings or claims filed with the Economic Department of the Tel Aviv District Court, which specialises in corporate and securities matters; and
2. examine board minutes, ISA filings and audit committee reports for any references to potential disputes, settlements or internal investigations.
• Disclosure obligations and market sensitivity:
1. for public companies, any material litigation or claim likely to affect the company’s financial position or control must be disclosed under the Securities Regulations (Periodic and Immediate Reports), 1970; and
2. buyers should ensure that all such disclosures have been made and that there is no risk of omission or misleading disclosure, which could trigger ISA enforcement or shareholder suits post-closing.
• Transaction structuring and indemnities:
1. consider allocating risk through representations and warranties or indemnities to protect against undisclosed litigation or post-closing liabilities; and
2. in cross-border acquisitions, ensure that Israeli choice-of-law and jurisdiction provisions are included to enable effective enforcement against Israeli parties.
• Governance and post-closing integration:
1. if the target has a history of governance disputes or shareholder activism, the buyer should review the composition of the board, the functioning of independent directors and corporate governance procedures; and
2. implementing compliance and documentation processes post-closing can serve to mitigate future exposure.
• Minority shareholder rights and approval requirements:
1. under Sections 270–275 of the Companies Law, certain transactions require approval by the audit committee, board, and the majority of disinterested shareholders; and
2. buyers should verify that all prior approvals were duly obtained to avoid claims alleging procedural irregularities or breach of fiduciary duty.

Israeli boards regularly seek independent external advice when considering significant corporate actions such as mergers, acquisitions, or related-party transactions. Common types of advice include:

• financial advice and valuation opinions (including “fairness opinions”) especially where the transaction involves a controlling shareholder or merger between affiliates;
• legal and regulatory advice – concerning corporate approvals, antitrust clearance (Competition Authority), and securities disclosure obligations;
• accounting and tax advice – particularly where share-for-share transactions or complex consideration structures are involved; and
• technical and environmental advice – in the energy and infrastructure sectors, from engineers or consultants assessing project risks or regulatory compliance.

While the Israeli Companies Law does not require a fairness opinion in all cases, the Israel Securities Authority and the Tel Aviv Stock Exchange generally expect public company boards to rely on a competent, independent evaluation when approving material transactions affecting shareholder value.