Israel's Elbit to split civilian cyber from spyware as products diverge

TEL AVIV (Reuters) - Defense electronics firm Elbit Systems ESLT.TA is splitting its cyber security unit as products from its civilian operations and government-grade spyware division diverge, an executive said.

Adi Dar, Chief Executive of Cyberbit, a unit of Elbit, gestures as he speaks at the Reuters Cyber Security Summit in Tel Aviv, Israel. October 26, 2017. Picture taken October 26, 2017. REUTERS/Amir Cohen

The chief executive of Elbit’s Cyberbit operation, Adi Dar, also told a Reuters Cyber Security Summit the move would clear up confusion faced by clients in having the units under one roof.

Israel’s largest listed defense company announced last month it was reorganizing its fully-owned subsidiary Cyberbit by keeping the commercial business separate and bringing its intelligence gathering operations back under Elbit ESLT.O.

Dar said the decision was made because the two sectors were diverging on an operational level, but also said offering commercial products alongside technologies used for national security and spying could cause confusion.

When Cyberbit was formed in 2015, it saw an advantage in offering a homeland security portfolio with phone tapping and monitoring systems, alongside civilian cyber protection for banks and utilities.

Dar said this structure was now a hindrance.

“The mix between the two provides limitations that we believe that if we remove them it would be for the benefit of the two sides of the equation,” he said at the summit, held at the Reuters office in Tel Aviv.

Dar said there has been strong growth in both sectors, but would not disclose how much revenue they generated. The split will take affect on Jan. 1.

Cyberbit’s government security and intelligence business, which Dar said accounts for most of its revenue, is subject to Israeli export restrictions that are in place to try to prevent sensitive technologies from falling into enemy hands.

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Additional reporting by Dan Pleck, Steven Scheer and Tova Cohen; Editing by Edmund Blair