Hapag-Lloyd, the fifth-largest container shipping line, has reached a preliminary agreement to acquire ZIM, Israel’s national shipping company, which ranks tenth in the industry. The deal, valued at over $4 billion, has been approved by ZIM’s board and will lead to the creation of a new fourth-largest container freight company, surpassing COSCO’s boxship division. Hapag-Lloyd plans to purchase all issued shares of ZIM and subsequently delist the company from the New York Stock Exchange.
In this transaction, Hapag-Lloyd will collaborate with Israeli private equity firm FIMI. While Hapag-Lloyd will manage the international aspects of ZIM’s business, it will sell certain operations to FIMI, allowing the firm to retain critical shipping capacity within Israel. FIMI’s new entity, “Zim Israel,” will oversee ZIM’s owned hulls and essential operations in Israel, while Hapag-Lloyd will take control of the chartered fleet and international routes.
ZIM is considered a strategic asset for Israel, crucial for national defense and logistics. The Israeli government holds a golden share in the company, ensuring operational control remains in Israel. Despite a record turnover of $8.43 billion in 2024, ZIM faces challenges, including lower freight rates and geopolitical tensions affecting operations, particularly in the Red Sea.
While the acquisition appears to be moving forward, complexities surrounding ZIM’s role in national security and the surprise nature of the deal for unions may pose obstacles. The deal follows the rejection of a previous buyout offer from ZIM’s CEO Eli Glickman, which was deemed insufficient by the board.
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