M&A activity in Israel shifts beyond high tech

"People with cash are starting to think about new markets and Israel is on the seam of developing markets' growth rates but developed markets' stability," said Waldman, who has seen higher levels of interest from foreign buyers.

According to Ernst & Young, growth in the global mergers and acquisitions market is set to hit its highest level in five years in 2015 with deal value already up 13 percent on 2014.

After Buffett

In many respects, when it comes to Israel Warren Buffett led the way for foreign investors in 2006. Berkshire Hathaway bought Iscar, an Israeli maker of metal cutting tools, for more than $6 billion in two transactions.

Iscar's precision tools are used by makers of heavy equipment such as cars and planes, it has plants around the world and has always prided itself on its innovative reputation.

British-based BCMS, a sell-side adviser for small- and medium-sized businesses, has set up shop in Israel to take advantage of growing foreign interest. The company is working on four deals and expects to complete 10 this year.

BCMS Israel Co-CEO Doron Ephrati said foreign investors looking to buy Israeli companies tend to seek targets without major consumer brands, such as paint make Tambour bought by Singapore's Kusto Group in 2014, to skirt the risk of boycotts,

Fizzy drink appliance maker SodaStream International, for example, has been targeted by consumer boycotts because its main factory lies in a Jewish settlement in the occupied West Bank.

Enzel at PricewaterhouseCoopers in Israel said she expected a busy year ahead for mergers and acquisitions.

Clal Insurance (CLIS.TA), which is being sold because of the new law, has been courted by Chinese buyers while energy firm Delek Group (DLEKG.TA) has struck a deal to sell control of insurer Phoenix Holdings (PHOE1.TA), reportedly to China's largest private investment firm, Fosun International (0656.HK).

"Our assumption is we will see more very significant deals in 2015," said Enzel.