Disbandment
The widely condemned attack on Qibya led to calls by government officials to disband the unit, which was instead merged with T'zanhanim company during January 1954. After the merger the joint outfit turned into a brigade size unit, namely Battalion 890. Sharon became the commander of the merged brigade which composed of two battalions—869 Battalion, made out of the original T'zanhanim company personnel and 101 Battalion, made out of former Unit 101 personnel.
The merge with T'zanhanim company was actually ironic since their officers were originally the biggest opposition against the creation of Unit 101. The reason for this was simply that they didn't want another competitor for retaliation missions. Before the formation of Unit 101 only they undertook these missions.
Operating as a unit within the brigade, they carried out a large-scale attack on the Egyptian army positions in the Gaza strip during February 1955. Sharon personally led the raid, codenamed Operation Black Arrow. It resulted in 42 Egyptian soldiers killed and 36 wounded, versus 8 Israeli dead. The newly formed brigade did most of the Israeli special forces operations during the remaining of 1950's.
Egyptian shock over the magnitude of their losses is often cited as one of the catalysts for the Soviet-Egyptian arms deal that opened the Middle East to the Soviet Union. Up to 20 such attacks were carried out between 1955 and 1956, culminating in the Qalqilya Police raid of October 1956. This particular raid targeted a position of the Jordanian Arab Legion in one of the old British police forts, during which 18 Israeli soldiers and up to a hundred Legionnaires were killed.
During the end of 1950s the IDF realized that they were lacking a small SF unit, since the T'zanhanim company had turned into an infantry brigade. That is the main reason why Avraham Arnan formed the Sayeret Matkal in 1958. In various ways the Sayeret Matkal combined the operational experience gathered by Unit 101 and relied on the structure of the British Special Air Service. After losing their special forces title, the T'zanhanim company formed its own SF unit— the Sayeret T'zanhanim in October 1958.
Read more about this topic: Unit 101