Israel's Finance Ministry Warns Against ZIM Shipping Deal Over Qatar Concerns

Israel's Ministry of Finance has recommended the government reject the proposed sale of ZIM Integrated Shipping Services in its current form, citing significant risks that outweigh potential benefits. The ministry's primary concerns include potential Qatari involvement, dependence on the German shipping company Hapag-Lloyd, and the endangerment of Israel's independent shipping capacity during emergencies.

The deal, initially agreed upon in February for $4.2 billion, involves Hapag-Lloyd acquiring ZIM, with ZIM's operations in Israel to be transferred to a new company, "ZIM Israel," owned by the FIMI fund. The Israeli government holds a "golden share" in ZIM, requiring its approval for such a transaction.

The Finance Ministry highlighted that the proposed structure would leave Israel with a significantly reduced fleet of 16 ships compared to ZIM's current 116, potentially impacting its ability to maintain essential supply lines, especially during crises like a blockade of the Bab el-Mandeb strait. Furthermore, the ministry expressed apprehension about Qatar and Saudi Arabia, which collectively hold over 22% of Hapag-Lloyd, potentially exerting influence over Israeli shipping due to their classification as hostile entities.

Concerns were also raised about ZIM Israel's reliance on Hapag-Lloyd for slots and containers, and the potential for Hapag-Lloyd to compete with ZIM Israel on the US route. The ministry warned that without state intervention, such as subsidies or guarantees, Israel could face a future without independent maritime transport capabilities, affecting both routine operations and emergency preparedness.

The Israel Port and Shipping Authority had previously warned of a potential national crisis if the deal proceeded as planned, emphasizing ZIM's critical role in national security and emergency logistics. The Finance Ministry indicated that a revised deal addressing these substantial risks could be considered.