Outbound Innovation: Foreign Direct Investment in Israel:对外投资: 以色列外商直接投资

November 18, 2015

Uncategorized

I am delighted to launch my newest bilingual publication, Outbound Innovation, which will focus on outbound investment in Israel.

Pujiang Innovation Forum was just closed last week. The Forum was founded in 2008 by PRC Ministry of Science and Technology and Shanghai Municipal Government and has been successfully held several times in the past years. In the previous forums, representatives from US, Russia, Japan, Sweden, Russia and other countries. have attended and gave speeches. This year is the first time that Israel has been selected as the country of honor for this Forum. Chinese Prime Minister, Li Keqiang and Israel Prime Minister, Netanyahu have sent greetings to the Forum.

 

Chinese conglomerate, Fosun Group has announced its purchase of majority shares of Israel insurance company, Phoenix Holdings Ltd. from its controlling shareholder, Delek Group Ltd. Fosun has been actively expanding its business landscape and purchasing overseas assets. Around the same time, Fosun signed another agreement to purchase stake of a dead sea cosmetics company, Ahava.

 

The Director of China International Capital Corporation, Mr. Li Jiange will serve as the first Principal of Guangdong Technion Israel Institute of Technology, which is jointly established by Shantou University (a Chinese university invested by Hong Kong tycoon, Lee Ka-Shing) and the world recognized Technion Israel Institute of Technology.

 

This November Edition is about to explore more details concerning the above topics for you. Stay with us and learn more. I hope that you will enjoy the reading.

 

Best Regards,

 

Amit Ben-Yehoshua, Senior Counsel

(Licensed in California & Israel, Master of Law in Chinese Law)

 

 

 

Israel Attended Pujiang Innovation Forum as the Country of Honor

 

Pujiang Innovation Forum was jointly established by the PRC Ministry of Science and Technology and Shanghai Municipal Government in 2008 and has been successfully held seven times. The forum is aiming to integrate innovation resources in a broader range, to keep pace with times and to join hands with global forces for innovation. The forum will promote innovation with a global vision and provide a platform for communication of innovation and development, exchange of advanced ideas, interaction among government departments, enterprises, universities and research institutes, release of new policies and diplomacy through science& technology.

 

This year’s forum was held on October 27th and 28th, 2015. This two-day form includes sub-forums like the entrepreneur forum with theme of “discover innovation and entrepreneurship star”, the country of honor forum which focuses on China-Israel cooperation led by science and technology innovation, the technology finance summit forum aiming to jointly build a technology finance ecosystem and the night of China & Israel forum.

 

According to the Israel Ministry of Foreign Affairs, it is the first time that Israel was selected as the country of honor due to Israel’s leadership in global innovation. Among the guest speakers include high level Israeli officials, Ambassador Mr. Matan Vilnai, Israel’s Ambassador in China, Mr. Avi Hasson the Chief Scientist of the Ministry of Economy of the State of Israel Ms. Anya Hana Eldan, the General Manager of the Early Stage Support Programs Office, the Chief Scientist, Mr. Asa Kling, the Director of Israel Patent Office.
Israel is regarded as the “Country of Innovation”, it is one of the innovation centers in the world. The per capita number of high-tech companies in Israel is ranked number three in the world and the total number of NASDAQ-listed Israeli companies ranked number four in the world. Moreover, the number of registered patents per capita in Israel ranked number fifth in the world, but don’t forget that Israel only has a small population of 7 million people. So what is the secret of success? Ambassador Vilnai advised at the night of China & Israel forum that it is culture of encouraging question and embracing failure that makes Israel successful in innovation. Ms. Anya Hana Eldan shared another key factor, i.e. the governmental support. In Israel, there are 19 incubators led by the Ministry of Economy. The government will set up the standard and system for the incubators according to different areas of technology and let non-governmental enterprise to run governmental funds. Ms. Eldan introduced that each year, they will receive more than 3,000 applications for start-up funds, and 2,000 among which will receive the financial support from the government. Also, the government mainly invests in the high risk part, research and development rather than the company that can make money fast. The wiliness to share the risk with start-up companies is what distinguishes Israel from the rest of the world.

 

China’s Fosun Purchased Israel Phoenix Holdings Ltd. for about 0.46 Billion US Dollars

Fosun, a Shanghai-based conglomerate announced on its homepage regarding the purchase of 52.31% of the issued and outstanding share capital of the Israel’s fourth-largest insurance provider, Phoenix Holdings Ltd. from its controlling shareholder, Delek Group Ltd.

 

According to the purchase agreement and relevant agreed adjustments,Fosun consented to acquire from Delek Group its stake in Phoenix for a base consideration of NIS1,763,204,090(approximately USD461,571,751) subject to certain interest calculations and adjustments at closing. The transaction represents one of the largest cross-border investments in the Israeli insurance sector to date. Fosun said in a statement to the Hong Kong Stock Exchange that the maximum payable may be about USD 489 million. So far, this transaction is still under the review and approval procedure within Israel’s government.

 

Phoenix was founded in 1949 as a diversified financial holding company with activities in the insurance and financial services sectors. Phoenix Insurance Company Ltd., one of Israel’s leading Insurance that provides life, non-life, health insurance and long-term savings. Phoenix Insurance Company Ltd. has a 16% market share in life insurance and a 14% market share in non-life insurance and is ranked fourth and third in life and non-life insurance respectively.As of 31 December 2014, Phoenix’s assets under management amounted to approximately NIS160 billion (approximately USD41.88billion). Phoenix has shareholders’ equity of NIS 3,805m (USD 987 million), earned 12.1% return on equity and has total assets of NIS101.34 billion (USD26.53 billion) with about 3,569 employees.

 

Fosun, the Chinese investment giant, was founded in 1992 and was listed on the main board of Hong Kong Stock Exchange on July 16, 2007. Fosun is deeply rooted in China and its investment model is “Combining China’s Growth Momentum with Global Resources”. Currently, Fosun’s business includes two major segments: integrated finance and industrial operations. It is not the first time that Fosun purchased Israeli companies.According to an article published on Israel’s Business Arena, Fosun has signed a purchase agreement to buy at least 51% ofAhava’s shares, a Dead Sea cosmetics company from Ahava’s existing shareholders.Earlier in 2013, Fosun Pharma together with a private fund has purchased an Israeli medical laser company, Alma Lasers for about 220 million US dollars.

 

 

Banker Li Jiange will be the First Principal of Guangdong Technion Israel Institute of Technology

 

It is reported that the Director of China International Capital Corporation, Mr. Li Jiange will run Guangdong Technion Israel Institute of Technology as its first principal. Li has previously served as researcher at the development research center of the State Council, the officer director of the Securities Commission of the State Council, the deputy chairman of the China Securities Regulatory Commission and other high-rank positions.

 

Earlier this year on April 9th, the China Ministry of Education approved Shantou University and Technion Israel Institute of Technology (TIIT)’s application for joint establishment of Guangdong Technion Israel Institute of Technology. Li told the reporter that it is the hope that via this cooperation we can introduce Israeli advance teaching model and entrepreneurial innovation idea into China and regard Guangdong Technion Israel Institute of Technology as a base to build a new Silicon Valley in South China and to promote the industry transformation and upgrading in Guangdong and China at large.

 

This joint cooperation was launched in September 2013 with 130 million US dollars donation from the Lee Ka-Shing Foundation, a charitable organization named after the Hong Kong tycoon.

 

 

TIIT is a prestigious university in the world. More than half of the NASDAQ-listed Israeli companies are founded by alumni of TIIT. In a recent research conducted by Massachusetts Institute of Technology (MIT) regarding innovation and entrepreneurial talent, TIIT is ranked number 6 around the world. According to a report from Bloomberg, among the CEOs in American high-tech companies with market value of more than 1 billion US dollars, TIIT’s alumni are ranked number 7.

 

The courses in TIIT will be taught in English, thus the students who apply for TIIT not only need to obtain high scores in China College Entrance Examination, but also need to be fluent in English. Upon graduation,Guangdong Technion Israel Institute of Technology will award its students with diploma of Guangdong Technion Israel Institute of Technology and bachelor’s degree of TIIT.

 

 

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