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

Israel's Ministry of Finance has recommended the government reject the current proposed sale of ZIM Integrated Shipping Services to German company Hapag-Lloyd. The ministry argues that the deal's risks outweigh its benefits, potentially jeopardizing Israel's independent shipping capabilities, especially during emergencies. Key concerns include increased reliance on the German company, potential Qatari influence, and a diminished Israeli maritime fleet.

In a document sent to the Government Companies Authority, the Finance Ministry highlighted several drawbacks. These include dependence on Hapag-Lloyd, an overly optimistic profit forecast, an aging fleet, an anticipated downturn in the shipping market, and questions about the economic logic of the deal for Hapag-Lloyd. The ministry also pointed to the fact that the new entity, ZIM Israel, would operate with only 16 ships, compared to ZIM's current fleet of 116 vessels plus 23 on order.

The proposed sale, agreed upon in February for $4.2 billion, involves Hapag-Lloyd acquiring ZIM's international operations while a new company, ZIM Israel, owned by the FIMI fund, would manage routes to Israel with 16 ships. This structure requires government approval due to the state's 'golden share' in ZIM, which is intended to ensure the company's operation during emergencies.

A significant concern raised by the Finance Ministry is the partial ownership of Hapag-Lloyd by Qatar and Saudi Arabia, which are considered hostile to Israel. The ministry fears that reliance on agreements with Hapag-Lloyd could allow these nations to exert pressure, citing a past instance where Qatar allegedly influenced a deal between Rafael Advanced Defense Systems and Volkswagen.

The Finance Ministry also warned that in a crisis, Israel might have to inject funds to maintain an emergency fleet. They noted that FIMI is an investment fund planning to exit its investments within a decade, and that the business forecast relies on overly optimistic shipping rate predictions. The ministry stated that a revised deal, significantly reducing these risks and clearly defining the state's needs, could be considered.