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a transaction is the acquisition of Alon Blue Square by C.A.A. Extra Holdings
(controlled by Moti Ben Moshe), a transaction in which our firm represented the
acquirer and which included public debt reorganization and settlements with a
large number of financial creditors.
The Israeli M&A market shows the increasing dominance of private equity firms in
large transactions. Apax, Tene, FIMI and Fortissimo have been some of the leading
private equity players. A derivative phenomenon, which is relatively new to Israel,
is transactions in which both the seller and the buyer are private equity funds.
A recent example is the sale of Fishman Thermo Technologies by Tene Growth
Capital (represented by our firm) to Fortissimo Capital.
Israeli companies have not only been the target for acquisition, but have also
played an active role as acquirers of non-Israeli entities. In the past year, companies
such as Teva Pharmaceuticals, Amdocs, Fruatrom and Nice have all consummated
outbound M&A transactions resulting in their take-over of significant U.S. and
European firms.
Cross-border transactions of the types described above have resulted in
professional collaboration between local and international law firms. Such
transactions require expertise in both domestic Israeli law and the laws of various
foreign jurisdictions. A change of control in an Israeli target, for instance, is likely
to raise a myriad of issues in jurisdictions in which subsidiaries of such a target
are incorporated. When such a transaction is coupled with acquisition financing,
which is typically the case, the number of cross-border issues grows exponentially,
requiring attention to matters such as creation and perfection of liens in multiple
jurisdictions.
Trends of recent years are expected to continue in late 2016 and into 2017.
Accordingly, we expect a continued growth in inbound M&A activity in the
high-tech sector, accompanied by enhanced presence in Israel of leading global
technology corporations, such as Microsoft, Apple, Facebook and Amazon, all of
which have already established Israeli R&D centers. We also expect a continued
increase inM&A transactions in traditional industries, some of whichmay stem from
interest of Chinese investors while others may derive from regulatory necessities.
As to outbound transactions, Israeli companies with global activities are likely to
increase their participation in M&A transactions as acquirers of foreign entities.
The Reduction of Concentration Law imposes restrictions on pyramid
structures in conglomerates that have issued multi-level public equity or debt.
In order to comply with such restrictions, it is expected that several Israeli
traded companies will be forced to divest links in their corporate chain of
holdings.