January 1, 2019 / 1:08 PM / 5 months ago

Israel Aerospace considering investment in drone maker Aeronautics

JERUSALEM (Reuters) - State-owned defense contractor Israel Aerospace Industries (IAI) [ISRAI.UL] said on Tuesday it was in talks to invest in local drone maker Aeronautics (ARCS.TA).

The talks were at an early stage, IAI said, and no financial details were disclosed.

Meanwhile Aeronautics, which was searched on Monday by Israel Securities Authority investigators, said separately it was also talking to another unidentified group regarding the sale of its 50 percent stake in the surveillance and reconnaissance company Controp Precision Technologies.

In August, Aeronautics rejected a 430 million shekel ($115 million) acquisition offer from IAI rival, state-owned Rafael Advanced Defense Systems, and businessman Avihai Stolero.

Israel-based Aeronautics manufactures unmanned aerial vehicles for military surveillance and defense purposes, as well as for the commercial sector.

On Monday, investigators from the market regulator searched Aeronautics’ office, the company said. A court has placed a gag order on details of the investigation.

It was not the first time Aeronautics has been probed by Israeli authorities.

In August 2017, Aeronautics said the Defence Ministry had suspended the marketing and export license for one of the firm’s attack drones to a single, significant customer in a foreign country. It denied it was at fault.

Israeli media at the time reported that the ministry had opened an investigation into Aeronautics over whether during a demonstration in Azerbaijan one of its drones was used to attack a military position in the neighboring country of Armenia, and if so, who was at fault.

In November that same year Israeli police said they were investigating one of the drone maker’s deals but did not give details.

Reporting by Ari Rabinovitch; Editing by Alison Williams

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