The signing of the peace agreement with Jordan, and the intensive negotiations with the Palestinians during the mid 1990s generated among the international corporations massive interest in commercial activities in Israel. Many saw Israel, whose economy is the most highly developed in the region, as the gateway to the entire Middle East. It was only natural that a leading international food manufacturer such as Nestlé would find that Osem is the Israeli company most suited to be integrated into the Nestlé worldwide network. Nestlé has gradually increased its holdings in Osem since it received a 1995 option for the acquisition of 10% of Osem’s shares, and now has a holding rate of 50.1%.

Originally, Nestlé was a Swiss company, but in due course became a multi-national concern that has spread out to all the corners of the earth. Nestlé is a huge industrial and marketing high-tech conglomerate with an excellent reputation that favors a management strategy based on mergers with successful food manufacturers throughout the world. Cooperation between Nestlé and Osem has led to a knowledge transfer agreement in which Osem is entitled to receive assistance from Nestlé for product research and development, information systems and food technology. Furthermore, the two companies have embarked on an employee exchange so that Osem can benefit from the vast experience that the Nestlé managers have acquired over time. As a result of the above, a Nestlé representative was appointed Chairperson of the company’s Board of Directors.

When Nestlé bought into its partnership with Osem, it represented both a vote of confidence in the company’s managerial and operational capabilities and also an undertaking to help Osem to move towards new horizons which until this point in time had only been a dream.

The partnership with Nestlé set new standards of quality and excellence and instituted advanced work procedures which placed Osem not only at the forefront of the Israeli food industry but also at the forefront of food industry throughout the world.

Osem is now part of a successful international company. Now more than ever the company is obligated to long-term planning, to maintaining a clear budgetary framework, and to cultivate and develop the human resources. We are all obligated to meet the challenge in order to continue as an integral part of this world wide success. The connection with Nestlé, which has opened up wide-ranging commercial opportunities, was a phenomenal breakthrough for Osem. It has also afforded Osem increased knowledge in a variety of relevant areas such as advanced technologies, economics, management, finances, marketing and advertising. The beginning of a new era at Osem can be felt every day in every position, the work methods, management style, and the striving for business excellence, a concept that is engraved on the shared Osem- Nestlé flag.

We have listed below the developments that have occurred in Osem since its partnership with Nestlé:

1995	The beginning of the relationship with Nestlé; Nestlé received the option of realizing 10% of Osem’s shares; Osem begins importing top-quality Nestlé products into Israel; Acquires 50% of Mili Ltd. and enters the frozen foods market; Acquires 50% of Tivol Ltd. and merges Mili into Tivol; The Ostive and Frostive distribution systems and combined; Production of oil begins at the Sderot factory.
1996	Nestlé decides to realize the options it received and acquires 10% of Osem’s shares;
1997	A number of events occur: A partnership with Tnuva is in place for the production and marketing of Nestlé ice cream under the Motte brand name; Control of Sabrah Salads is acquired.
1998	A number of events occur: Nestlé increases its holding in Osem to 47% and a knowledge agreement is signed allowing for the transfer of knowledge in product research and development, information systems and food technology. Acquisition of 50% of the Beit Hashitah pickle factory; Merger of Beit Hashitah and Assis (Osem-owned) industrial activities in canned goods, pickled vegetables, syrups and jellies; Osem begins to market Friskies pet food products owned by Nestlé; Hod Lavan Ltd. is acquired by Tivol, a company in the Osem Group, and its industrial activities are integrated into the Off Tov plant.
1999	A number of events occur: Osem increases its share in Tivol to 51%; Osem’s trading network is reorganized, the structure of the sales and distribution set-up is adapted to allow for greater differentiation between customers, and the Osem and Fromin distribution systems are united to form a single system; The Ostive chilled goods distribution system is merged with the Frostive frozen goods distribution system to form one network under the Estive name; Osem’s volume of sales reaches NIS 2 billion for the first time.
2000	Nestlé increases its holding in Osem to 50.1%.
2002	A number of events occur: Nestlé launches its worldwide Snacks R&D Center built at the Osem facility in Sderot; Osem Bnei Brak activities are merged into the Sderot factory.
2003	A number of events occur: Full control of the Beit Hashitah factory is acquired; Tnuva’s share of Nestlé Ice Creams is acquired; The new modern distribution center at Ramat Hashofet is launched