Israel’s construction industry continues to consolidate around large and powerful players: Shoval Engineering has announced the acquisition of veteran construction company Yitzhak Stern & Co. Ltd., in what is shaping up to be one of the most significant deals in the sector in recent years.

The transaction is expected to significantly strengthen Shoval’s execution division and provide the group with three construction companies holding a G5 contractor classifications - a move that will expand the group’s execution capabilities, operational scale, and control over projects nationwide.

Yitzhak Stern & Co. Ltd., which has been operating in the industry for nearly five decades, is considered one of Israel’s most recognized and long-standing construction firms. The company is currently involved in building thousands of housing units alongside projects in the commercial, office, logistics-center, public-building, and urban-renewal sectors.

At Shoval Engineering Group, the acquisition is viewed as part of a broader growth strategy aimed at strengthening control over the entire value chain - from project initiation through construction and final delivery - while also expanding the company’s activity for external clients from both the public and private sectors.

According to the companies’ announcement, Amnon and Assaf Stern will continue to play an active role in the business following the completion of the deal and will hold approximately 16% of Shoval Group’s shares. In addition, company CEO Lior Snir will remain in his position. The transaction is subject to approval by Israel’s Competition Authority and the completion of the conditions agreed upon by both parties.

Moshe Miller, Chairman of Shoval Engineering Group, said: “We are building one of the strongest integrated entrepreneurship and execution groups in the industry,” while representatives of Stern emphasized that the decision to join Shoval was driven by a desire to preserve the company’s values and ensure its continuity in the years ahead.

Industry insiders estimate that the deal reflects a growing consolidation trend within Israel’s construction sector, as major companies seek to strengthen their independent execution capabilities amid labor shortages, high construction costs, and intensifying competition for large-scale projects across the country.