Emirati state weapons contractor invests in Israeli defense supplier

Thirdeye Systems, an Israeli military supplier, said it has sold a 30% stake to Emirati state-owned defense conglomerate EDGE for $10 million, in a rare public investment by an Emirati firm in Israel since the Gaza war began 15 months ago.

EDGE will also put an additional $12 million into a new, majority EDGE-owned joint venture with Thirdeye Systems, the Israeli company said on Monday.

A third party, whose identity was not disclosed, will hold 6% with Thirdeye Systems owning the remaining 43% of the JV.

EDGE's investment will help Thirdeye Systems expand into new markets, Chief Executive Lior Segal said in a statement.

EDGE President Rodrigo Torres said the deal was of mutual benefit and would accelerate the development of new systems.

Many Emirati companies have shied away from openly doing business with Israeli firms over the past 15 months, with the war and Israel deeply unpopular throughout the Arab world.

The UAE established diplomatic ties with Israel in 2020, setting off a flurry of business activity between the two states that later publicly cooled following the onset of the conflict.

Abu Dhabi has criticised the conduct of Israel's military operations in Gaza, but the countries have maintained relations.

Thirdeye Systems develops technology that can detect drones and is a supplier to the Israeli military and some NATO members.

Its share price has risen sharply over the past 15 months as it won new contracts to supply the Israeli military. On Tuesday, its share price was up 51% since the war began, at 333.8 Israeli shekels ($92.29), according to LSEG data and Reuters calculations.

EDGE is the UAE's largest arms maker. It is owned by the government and in 2021 announced it would jointly develop unmanned vessels, capable of missions including submarine detection, with state-owned Israel Aerospace Industries.

($1 = 3.6167 shekels)