Teva, a major holding in Israel’s exchange traded funds (ETFs), said it’s going to buy up a rival.

The $7 billion purchase of Barr Pharmaceuticals, will further cement Teva’s status as the world’s largest generic drug maker. Barr is the fourth-largest. Teva also said it’s going to expand its presence into the United States and Eastern European markets, as well.

The deal is expected to close at the end of this year, the Associated Press reports.

Teva (TEVA) is 22.5% of the iShares MSCI Israel Investable Market Index (EIS) and 8.3% of the NETS TA-25 (TAV). Both funds launched this year. EIS is up 0.8% since inception on March 28, while TAV is down 10.8% since its June 9 inception.

Meanwhile, Lockheed Martin, the world’s largest defense company, says it may sell Israel some combat ships with a value of as much as $1.9 billion, report Edmond Lococo and Tony Capaccio for Bloomberg.

The U.S. Defense Department said that it was in the interest of the United States to help Israel develop and maintain a strong self-defense capability.

Some aerospace and defense ETFs could benefit:

• PowerShares Aerospace & Defense (PPA): down 17.9% year-to-date; Lockheed is 7.2%
• iShares Dow Jones U.S. Aerospace & Defense (ITA): down 19.1% year-to-date; Lockheed is 7.6%

Tags: Aerospace & Defense, Emerging Markets, Israel, ITA, Middle East, PPA