Israel's Elbit Systems to Pick Up 44% Stake in Adani Defense Unit

Israel's Elbit Systems Ltd. is set to acquire a 44% stake in Adani Defence Systems and Technologies Ltd. (ADSTL), with the collaboration aiming to propel the development and manufacturing of various autonomous aerial technologies and systems dedicated to defense applications.

The strategic move was formalized through the signing of a shareholder agreement and share subscription agreement between Adani Defence Systems and Elbit Systems, as announced in an official filing with the stock exchanges.

As per the agreement, Atharva Advanced Systems and Technologies Ltd. (AASTL), a subsidiary of ADSTL established by Adani Group flagship Adani Enterprises Ltd. in August of the current year, will witness a 44% subscription of stake by Elbit Systems. Consequently, ADSTL and Elbit Systems will hold 56% and 44% shares in AASTL, respectively, post the share issuance.

Furthermore, AASTL will no longer remain a wholly-owned subsidiary of ADSTL. The composition of the company's board will reflect representation from both ADSTL and Elbit Systems, with ADSTL maintaining a majority presence.

Elbit Systems, recognized for its involvement in the development of military aircraft and helicopter systems, naval and land vehicle systems, as well as electronic warfare and signal intelligence systems, solidifies its foothold in the autonomous defense technology arena through this partnership.

This collaboration comes at a crucial time for Adani Enterprises, which has faced challenges in the stock market, with a 5% decline in the last month and a significant year-to-date decrease of 42.85%. The company's flagship, Adani Enterprises, attributed these fluctuations to a scathing report by Hindenburg Research alleging stock manipulation and accounting fraud within the Adani group firms.

Investors and industry observers will be closely monitoring the developments in Adani's defense technology venture and its other strategic moves in the coming weeks.