Business in Brief: SodaStream Staff to Get 18,000 Shekels Each as Bonus After Sale to PepsiCo

IMI wins giant Israel Defense Ministry contract as Elbit is set to acquire company ■ SodaStream staff to get 18,000 shekels each as bonus after sale to PepsiCo ■ Rafah reaches deal to produce pharmaceuticals in Israel for Teva

Boxes containing Sodastream products are seen at a shop in London, Britain.
REUTERS/Simon Dawson

IMI wins giant Israel Defense Ministry contract as Elbit is set to acquire company

Israel’s Defense Ministry said on Monday it was placing a major order for precision rockets with IMI Systems, the state-owned arms maker due to be acquired soon by Elbit Systems. The ministry said the contract would run into the hundreds of millions of shekels. The contract is the first under a program announced by Defense Minister Avigdor Lieberman in January to spend up to $500 million on developing surface-to-surface missiles with ranges of up to 300 kilometers. The rockets IMI will supply will be capable of hitting targets at distances of between 30 kilometers and 150 kilometers and designed to counter Hezbollah’s rocket arsenal. Elbit CEO Bezhalel Machlis told analysts last March that he saw big potential in joining IMI’s missile capabilities with Elbit’s electronics. The company’s acquisition of IMI for as much as $522 million was approved last week by the Antitrust Authority. Elbit shares ended up 0.8% at 451.90 shekels ($124.51). (Hagai Amit and Yoram Gabison)

SodaStream staff to get 18,000 shekels each as bonus after sale to PepsiCo

SodaStream International employees will be getting a substantial bonus after the Israeli maker of fizzy-drink dispensers agreed last week to be acquired by PepsiCo for $3.2 billion. SodaStream CEO Daniel Birnbaum told employees late on Sunday that anyone who has been working for the company at least a year will get 18,000 shekels ($4,960) and those who have worked less than a year a bonus prorated to the number of months on the job. The bonuses, which will cost the company more than 46 million shekels, are equal to about 2.5 times the average monthly salary for a SodaStream workers and will be paid when the sale is completed in December, Birnbaum said in a letter, adding that PepsiCo had agreed to the bonus. Birnbaum himself is due to get $23 million from the sale thanks mostly to stock options he was awarded earlier this year. SodaStream shares finished down 0.2% at 516 shekels. (Guy Erez)

Rafah reaches deal to produce pharmaceuticals in Israel for Teva

Some of the drug manufacturing Teva Pharmaceuticals is shutting down in Israel as part of its cost-cutting drive will be sub-contracted to the Israeli company Rekah Pharmaceuticals, the two companies said on Monday. Rekah’s wholly owned Vitamed Pharmaceuticals subsidiary will take over manufacturing prescription and on prescription drugs as well as anti-infection products used in hospitals, they said. The agreement will run for 10 years, with an option to extend it for three years, unless either of the two sides give two-year notice they want to end it. As part of its cost-cutting program, announced by CEO Kare Schultz last December, Teva is cutting 25% of its global and Israeli workforce, including shutting plants in the Israeli cities of Ashdod and Jerusalem. No value was placed on the contract, but Rafah will be paid based on production volumes and other factors. Rafah shares ended 5.65% higher at 38.35 shekels ($10.57). (Yoram Gabison)

IDB Development loses 77% of $7 million investment in cryptocurrency

IDB Development, the holding company controlled by Eduardo Elsztein, lost 77% of its $7 million in the cryptocurrency company Colu in just half a year, according to its second-quarter financial report released last week. Colu has developed an electronic-wallet app that encourages the use of its CLN cyber-currency with local businesses by offering incentives to both buyers and sellers. Last December IDB spent $7 million of money raised from a bond offering to invest in 9.5 million of the Colu tokens at a price of 9.5 cents each. But the CLNs, like other cryptocurrencies, have fallen sharply in value since then and at the end of June were worth just 2.2 cents each. IDB invested another $7.5 million on options to buy Colu shares, whose value was not updated in the report. All told IDB ended the first half of 2018 with a loss of 427 million shekels, widening from a 376 million loss a year earlier. (Michael Rochvarger)

Tel Aviv shares rise, bringing gains since mid-month to 5.6%

Tel Aviv shares ended higher on Monday, bringing gains on the TA-35 index to 5.6% since the middle of the month. The benchmark index rose 0.9% to close at 1,652.83 points, while the TA-125 added 0.8% to 1,486.02, on relatively heavy turnover of 1.57 billion shekels ($430 million). Frutarom led the most actives, adding 1.5% to 371.40 shekels. Top gainers on the TA-125 were Electra Consumer, which climbed 6.9% to 37.70, and Fattal Holdings, with a 4.9% gain to 420. Brainsway jumped 8.8% to 25.10 after reporting it narrowed its operating loss to $1 million in the second quarter from $1.7 million a year earlier. Shagrir dropped 5.5% to 15.96 after turning in a 71% drop in net profit.  Gazit Globe declined 0.4% to 33.08. The company said it bought a 30-dunam site in Savyon for 116 million shekels to developing into a shopping center. TA-125 losers were led by Neto Holdings’ 5.75% drop to 306.50.  (Michael Rochvarger)