Israel's Economy Minister Leans Toward Approving $4.2 Billion ZIM Shipping Sale

Israeli Economy Minister Nir Barkat is reportedly leaning towards approving the sale of the ZIM Integrated Shipping Services company for approximately $4.2 billion, a significant shift from his previous stance. Despite strong opposition from professional staff within his ministry, Barkat has instructed his team to hold further meetings with the potential buyers, German shipping giant Hapag-Lloyd and Israeli investment fund FIMI, after the upcoming holidays to formulate an updated official position supporting the deal.

The dramatic change in the minister's position followed a personal meeting with Yishai Davidi, founder of FIMI. Davidi reportedly addressed Barkat's primary concerns, particularly regarding foreign involvement. While the Economy Ministry had previously worried about indirect influence from Qatar and Saudi Arabia, which hold shares in Hapag-Lloyd, Davidi argued that ZIM's current status as a company without a controlling core, traded on the stock exchange, makes it more vulnerable to hostile takeovers by these entities than under the proposed new structure.

The complex transaction involves splitting the company and establishing a smaller entity, "ZIM Israel," which would retain only 16 vessels and ensure the state's "golden share" is preserved. Security concerns have also been addressed, with relevant bodies, including the defense establishment and the National Security Council, reportedly finding no security impediments to the deal. Employee concerns, including a plan for about 200 redundancies, were also reportedly eased by Davidi's promise of unprecedentedly attractive retirement packages, softening the workers' committee's opposition and the minister's initial reservations.

Despite the Economy Ministry's potential shift, the path to final approval remains challenging. Other government ministries, such as Transportation and Agriculture, still oppose the sale. Given the anticipated sharp disagreements among government ministers and various regulators, the final decision on ZIM's future is expected to be put to a government vote, possibly postponed until after the upcoming elections.