Israel weighs U.S. listings for defense giants IAI and Rafael

Israeli officials and executives from state-owned defense firms Israel Aerospace Industries and Rafael will travel to the United States in July to explore possible public listings, a step that could open two of Israel’s most sensitive industrial assets to American capital markets.

The government is considering selling as much as 30% of the companies, a change that would leave the state in control while introducing private investors into businesses that sit at the center of Israel’s defense ecosystem. Any listing would force a new balance between strategic oversight, disclosure requirements and the valuation discipline of public markets.

A U.S. listing would matter because it would move IAI and Rafael into a very different investor and regulatory framework than the one that has governed them as fully state-owned firms. American buyers would not simply be betting on earnings growth; they would be taking stakes in companies whose fortunes are tied to national security priorities, procurement cycles and the government’s willingness to loosen its grip on ownership.

The timing also reflects the broader market backdrop. Global military spending remains elevated, and demand for advanced defense technologies is still strong, giving governments and defense contractors more reason to think about capital access and expansion. For Israel, the debate is not only about raising money. It is also about how far the country is willing to rework the ownership of two flagship firms that have long been treated as strategic assets first and commercial businesses second.

For now, the trip signals exploration rather than a final decision. But the fact that the discussion is centered on U.S. listings shows how Israel is testing whether its defense champions can tap deeper pools of capital without surrendering the state’s core control over them.