Israel to receive about $55 million in taxes from the $1.1 billion Waze deal
Since most of Waze’s stockholders are foreign residents they are not obligated to pay taxes in Israel.
WATCH: Ilan Gattegno breaks the deal down.
By Ilan Gattegno, Zeev Klein, Reuters & Israel Hayom Staff
The government is expected to receive only about 200 million shekels ($55 million) in taxes from the reported $1.3 billion acquisition deal signed between Google and the Waze traffic and navigation app. While the final amount of the tax payment will depend on the ultimate structure of the deal, most of the Israeli startup company’s stockholders are foreign residents who are notobligated to pay taxes in Israel.
WAZE – Photo: by IsraelandStuff/PP
On Monday, it was reported that the long courtship for Waze may finally be over, with Google as the victor.
Sources told the Israeli financial newspaper Globes that Google was acquiring Waze for $1.3 billion. The Bloomberg business news outlet reported Monday that the deal was in its final stages and stood at $1.1 billion. Other American news outlets reported that the deal had already been finalized, but that neither side was commenting on it.
The U.S. stock exchange, where Waze is publicly traded, is expected to receive the first official announcement confirming the sale.
1.3 billion reasons to smile: Senior Waze management in the company’s office – Photo: Yonatan Shaul
The news comes after Google, Facebook and Apple were all rumored to be vying for the company, which uses crowd-sourced traffic data to offer turn-by-turn navigation.
Founded in 2009, Waze is backed by $67 million in funding and has 45 million users, making it one of Israel’s most successful startups.
While the deal is obviously a big (albeit expensive) win for Google, it is perhaps a bigger loss for Facebook, which tried and failed to acquire the company. According to an earlier report, Facebook’s negotiations fell through in part because Waze wanted to keep its employees in Israel, something Facebook did not want.
While Waze is arguably a better fit for Google, it still would have been a good acquisition for Facebook, which does not yet have its own decent mapping solution.
Google has not commented on the reported purchase. “We don’t comment on rumors or speculation,” a company representative said in an email.
Meanwhile, it was also reported on Monday that Economy and Trade Minister Naftali Bennett had been offered the position of Waze CEO, but declined.
“The economy and trade minister was indeed offered the post of CEO after the company he owned was sold, but he preferred to dedicate himself to public service,” Bennett’s bureau said.
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