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Taking advantage of the crisis in world markets, Iscar recently bought a Japanese competitor in the cutting-tools market, Tungaloy, for almost $1 billion. It purchased about 95% of the company's shares from Japanese investment bank Nomura in the first takeover of a large Japanese company by an Israeli outfit.

Tungaloy is considered the leading firm in the Japanese market, both in sales as well as technology and innovation. The deal will enable Iscar to establish itself in the Far East, where it has factories in South Korea and China. Tungaloy has 2,700 employees and annual revenues of $450 million, $300 million from Japan. Its annual operating profits are estimated at $60 million.

The sale of a Japanese company to any overseas investor is uncommon. The deal may be viewed as part of the Japanese government's plan to increase cooperation with Israel, or it could be a vote of confidence in Iscar's management, and of course in its controlling owner, Warren Buffett.