As every month, VC Cafe is re-posting the “Invest in Israel” Newsletter, published by the investment promotion center of Israel’s Ministry of Industry, Trade and Labor, which offers many helpful tools for prospecting investors. See the February 2011 edition after the jump. For previous editions, click here.
ISRAELI ECONOMY GROWS 7.8% IN FOURTH QUARTER
Israel’s economy grew 7.8% in the fourth quarter of 2010, the fastest pace in four years, and well beyond the Bank of Israel’s predictions of between 4.3 and 4.6 percent.
Growth in the fourth quarter was mainly driven by private consumption and investments. Israel’s Central Bureau of Statistics also reported a higher-than-expected annual growth rate of 4.5 percent, exceeding OECD estimates of 3.9% and well above the 2.8% average registered in 2010 by countries of the club of developed nations, which Israel joined last year.
The economy grew by 5.2 percent in the second quarter and 4.4 percent in the third quarter.
ISRAEL SETS FAVOURABLE FISCAL POLICY ENCOURAGING GAS EXPLORATION
A Committee to Examine the Fiscal Policy on Oil and Gas Resources in Israel recently recommended a new fiscal structure that ensures the cash flow of projects during the debt repayment period and reduces the state’s share in profits on par with other countries.
The committee’s suggestions, which take into consideration feedback from the public, keep a royalty rate of 12.5% while implementing alternative fiscal tools to increase the state’s share. The initial rate of levy will be 20% and rise gradually to 50% according to the amount of excess profits, which is 10% lower than originally proposed (20% raised to 60%). Furthermore, the share of the net profit for the state and public will increase from one third to 52%-62% (which is slightly lower than the proposed increase to two-thirds).
The committees recommendations follow the discovery of large-scale natural gas deposits in recent years within the economic waters of Israel, and expectations of additional gas deposits in the sea that are even greater then those found to date.
ISRAEL AND CHINA COMMIT TO EXPANDING ECONOMIC COOPERATION
Israeli Minister of Industry, Trade and Labor Shalom Simhon met Chinese Commerce Minister Chen Deming vowing to to expand economic, trade and technological cooperation between the two countries.
Chen, who headed a trade delegation of 35 Chinese entrepreneurs from 12 of China’s largest companies to Israel, said Chinese enterprises and financial institutions are excited to collaborate with their Israeli counterparts. Among the companies represented were ZTE, one of China’s largest telecom equipment makers, and Yingli Green Energy Holding, a leading renewable energies firm.
Chen also met Israeli President Shimon Peres who highlighted the key role of technology innovation in economic development of Israel and China.
Israeli exports to China rose 97% to $2.05 billion in 2010 from the year before, while exports from China rose 35% to $4.73 billion. Products from the high-tech sector made up about 59% of Israeli exports.
BRITISH CHIP MAKER CSR BUYS ZORAN CORP
CSR, a provider of chips for wireless technologies, is acquiring a 65 percent share in Zoran Corporation, an Israeli maker of technology for digital photography and video, for about $679 million in stock.CSR, a 12-year-old company based in Cambridge, England, is a supplier of wireless connectivity and location chips. It sells Bluetooth, GPS, FM, Wi-Fi and audio devices, and employs about 1,500 people.
Zoran, which was established in 1983, provides imaging and video chips for digital camera, home entertainment and multifunction printer products and employs about 1,550 people. Zoran’s clients include Hewlett-Packard, LG Electronics, Samsung Electronics, Sony, SANYO, Olympus, Toshiba and many more.
US CONNECTIVITY GIANT CORNING BUYS MOBILE ACCESS
World-leading optical connectivity company Corning Inc has acquired Israeli wireless network solutions developer MobileAccess Ltd.
MobileAccess, formerly Foxcom Wireless, was founded in 1998. The company develops distributed antenna system (DAS) solutions for wireless telecommunications coverage inside buildings. MobileAccess’ customers include AT&T Inc. (NYSE: T), Verizon Corporation (NYSE: VZ), and Deutsche Telekom AG (NYSE: DT; DAX: DTE), as well as financial and other corporations.
MobileAccess will be integrated into Corning Cable Systems, part of Corning’s telecommunications business segment. Corning manufactures specialty glass and ceramics for keystone components for consumer electronics, mobile emissions control, telecommunications and life sciences.
PRIVATE EQUITY FIRM SUMMIT PARTNERS BUYS ISRAEL’S ANSWERS.COM
AFCV Holdings, a unit of private equity firm Summit Partners, bought Answers Corporation’s community-generated Q&A site Answers.com for $127 million in cash.
The web answers search engine, one of the world’s leading Q&A sites with 5.5 million registered members as of November 2010, was established in 1999 and recently hit its 10 million answers.
Summit Partners, founded in 1984, has raised more than $11 billion in growth capital, and has invested in more than 320 growing businesses across North America, Europe and Asia.
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