National Economic Council Deputy Head Morris Dorfman told Bloomberg in an interview that there will be around 40 companies that will likely be put on the auction block or consolidated. The official said foreign funds have shown interest in a number of Israeli firms that will be put up for sale by the state in its effort to bolster competition, Bloomberg reported.

The companies up for bid include the largest mobile phone provider in the country, Cellcom Israel Ltd and its biggest supermarket chain Shufersal Ltd. A law passed in December made the sales a requirement in order to reduce the hold that conglomerates have on the Israeli economy, the report said.

While he did not identify the funds, Dorfman said he sits with a lot of interested investors every week. He said there are a lot of investors from the US and China. Some are from Europe.

A Bank of Israel report in 2009 revealed that 20 families control 25% of the listed firms and 50% of the entire market share on the Israeli bourse, Dorfman said. In a country with a population of 8 million people, this is one of the highest concentrations of wealth among developed nations, the report said.

The push to lessen the control of conglomerates coincides with the country's efforts to lure foreign investors, especially Chinese, to Israel. Last year, Prime Minister Benjamin Netanyahu headed a trade delegation to China where he asked foreign investors to pour money in Israel. He made the same appeal in Davos last month, the report said.

According to Rafael Gozlan, the Israeli economy's stability and fundamentals is a plus for foreign investors. The chief economist of IBI-Israel Brokerage and Investment Ltd based in Israel told Bloomberg over the phone, "Assets are being sold, not because they are distressed, but because of a structural change. You are buying not because of a crisis here, but because there is a desire to boost competition in the economy.