German shipping behemoth Hapag-Lloyd announced on Monday that it has signed an agreement together with Israeli private equity fund FIMI Opportunity Funds to buy Haifa-based shipping rival Zim Integrated Shipping Services, in a deal worth $4.2 billion.
Hapag-Lloyd will acquire 100 percent of Zim’s shares for a consideration of $35 per share in cash. The price tag represents a 58% premium on the shipping firm’s share price on February 13. Zim operates 145 ships, including 130 container vessels.
As part of the deal, Israeli financial investor FIMI will take ownership of a portion of Zim’s business related to the shipping firm’s Israel operations and form “New Zim.” The Israeli container shipping company will serve global trade routes into Israel and provide continued secure liner shipping services to the country. This is intended to maintain shipping routes and supply to the country in emergencies, such as in the event of war, since the vast majority of imports of goods arrive in Israel via the sea.
With a fleet of 16 vessels, New Zim will directly connect Israel with major global ports in the EU, the US, the Mediterranean Sea, and the Black Sea. Meanwhile, Hapag-Lloyd will take control of Zim’s international operations, including shipping routes between East Asia and the Americas, and between Asian ports.
“FIMI recognizes and believes in the strategic importance for the State of Israel of a strong independent Israeli shipping company,” said FIMI Funds founder and CEO Ishay Davidi. “We will create a stable Israeli company, New Zim, and view Hapag-Lloyd as a significant strategic partner for its ongoing operations.”
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“New Zim will integrate significant transatlantic capabilities, alongside
additional shipping routes to Europe, Africa, the Mediterranean Sea, and the Black Sea, supported by advanced global maritime transport capabilities,” Davidi added.
Illustrative: The Hapag-Lloyd container ship ‘Chacabuco’ from Monrovia is docked in Hamburg, Germany, March 31, 2023. (AP Photo/Matthias Schrader)
Hapag-Lloyd said it entered into a binding memorandum of understanding with FIMI, under which the special state share, also known as a “golden share,” held by the Israeli government in Zim, will be transferred to a FIMI subsidiary.
However, the government, which views Zim as a strategic national asset, must still give its approval. In protest to the takeover, Zim’s workers’ union on Sunday launched a strike action and suspended all activities at the company’s headquarters in Haifa.
As Yemeni Houthi rebels attacked ships in the Red Sea during the Gaza war, in what they said was a show of solidarity with Palestinians, the world’s largest container freight companies temporarily suspended sending their vessels through the Red Sea and halted some of their services to Israel.
To ensure maritime traffic continues even in times of war, the Israeli government holds a “golden share” in Zim, giving it special rights to require Zim to maintain a presence in Israel, including a certain number of vessels that must remain Israeli-owned.
Founded in Israel in 1945, Zim is a global container liner shipping company with operations in over 90 countries, serving more than 33,000 customers across 300 ports worldwide, with major trade routes including the Pacific, Latin America, the Atlantic, Cross-Suez, and Intra-Asia. The New York Stock Exchange-traded company has a market value of $2.7 billion and employs 1,000 people, including 160 at its headquarters in Haifa.
As part of the merger agreement, Hapag-Lloyd has committed to provide support to Israel-incorporated New Zim, and retain Zim’s employees.
“Zim is an excellent partner for Hapag-Lloyd,” said Hapag-Lloyd CEO Rolf Habben Jansen. “We will use this opportunity to create the best team from the exceptional talent in Zim and Hapag-Lloyd – in Israel and around the globe – and we commit ourselves to build a very substantial and long-term presence in Israel.”
Illustrative: A handout picture provided by the Yemeni Al-Joumhouriya TV on February 26, 2024, shows the Rubymar cargo ship sinking off the coast of Yemen, a week after being targeted in a Houthi attack. (Al-Joumhouriya TV/AFP)
Hapag-Lloyd said the merger with Zim would secure its market position
as the fifth-largest container shipping company worldwide with a modern fleet of over 400 vessels. Among Hapag-Lloyd’s shareholders are Qatar Holding, a subsidiary of Qatar’s sovereign wealth fund, which owns a 12.3% stake, and Saudi Arabia’s Public Investment Fund, which has a 10.2% stake.
The merger deal is expected to close by late 2026, subject to approval by Zim shareholders and other approvals, including regulatory authorities and the State of Israel.
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