After growing speculation that opposition was mounting in Israel to Hapag-Lloyd’s proposed acquisition of Zim along with the investment fund FIMI, the Israeli media outlet Calcalist is reporting Tuesday night that Israel formally closed the review of the original deal. According to the report, the Government Companies Authority closed the review of the original proposal but left the door open for Hapag and FIMI to submit a new proposal and restart the review.
The rejection of the original terms comes after Hapag and FIMI reportedly presented the framework to revise the original proposal. While not increasing the financial offer, it reportedly proposed adding an Asian trade route to the surviving company and strengthening government control of the Israeli company. Reuters reported on Tuesday that Hapag was still urging the Israeli government to review the revised terms, which were developed in response to earlier objections to the deal.
Hapag and FIMI were proposing to acquire Zim and create a new domestic shipping company that would manage the routes to Israel and meet the obligations of the government’s Golden Share. It reportedly added the Asia route, increased the number of ships and reefer capacity, and improved the training and job provisions in the revised offer. Hapag was to assume Zim’s current international service and chartered fleet of ships.
The Israeli media was reporting on Monday that the Finance Ministry had provided a paper that officially rejected the deal, citing concerns over national security, maritime independence, and the viability of the new Zim. It reportedly raised concerns that Zim would be dependent on Hapag and referenced the investments in the German company by Qatar’s and Saudi Arabia’s sovereign wealth funds. It also questioned the structure of the deal for FIMI, the long-term financial stability of the new company, while pointing out Zim would retain older ships. The Finance Ministry expressed its opposition, saying the material risks were not adequately addressed, and it recommended not approving the deal.
This came after reports that the Economic Ministry had softened its position. Initially, it also opposed the deal but said it believed concerns were being addressed. It proposed an additional meeting with Hapag to address the remaining concerns.
Earlier reports had said other ministries and factions within Israel also opposed the deal, including the union. The Defense Ministry was also opposing the deal based on security concerns and saying Israel needed a strong, independent shipping company.
The final blow, however, may have come from the reports of opposition from the Prime Minister’s Office. Calcalist reported that the Economics and Infrastructure Division of the Prime Minister’s Office cited a “gap between the corporate structure and the operational and strategic reality.”
Calcalist reported it was recommending rejecting the deal because it did not guarantee operational and strategic independence for the new Zim Israel.
The Companies Authority, which represents Israel in the administration of the Golden Share, Calcalist reports, sent a letter on Tuesday night, September 29, to Hapag-Lloyd informing it that the review was concluded. It says the review had been going on since March, but the documents and details had not yet been provided. It officially terminates the review for the original structure but leaves the door open that a revised deal could be presented by October 6.
The authority is reportedly, however, requiring the new deal to be reviewed and approved by the boards of the companies. It is also requesting a comprehensive and detailed application with full information on the revised terms.
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Calcalist reports there is a February 2027 deadline for the deal, which, however, could be extended to June 2027. It speculates that Zim will have to decide if it wants to continue the review process, seek a new buyer, or end the process.
It came as Hapag-Lloyd presented a more optimistic outlook to shareholders. The company cited continued strong market demand and ongoing positive development of spot freight rates. It significantly increased its financial outlook for the year, raising its earnings projection to a range of $3.9 to $4.4 billion (EBITDA) for the full year.