Israel's Finance Ministry Opposes Zim Shipping Sale to Hapag-Lloyd

Israel's Ministry of Finance announced Monday its opposition to the proposed sale and merger of the Israeli shipping company Zim Integrated Shipping Services with Germany's Hapag-Lloyd and the Israeli investment fund PIMCO. The ministry stated that the current deal structure presents significant economic, operational, and security risks that outweigh its benefits.

The ministry's position, approved by relevant professional bodies including the Accountant General, Budget Division, Chief Economist, and Legal Department, was submitted by Ministry Director General Israel Malachi. Key concerns cited include Zim's complete structural and operational dependence on a competitor, the involvement of potentially hostile shareholders like the governments of Qatar and Saudi Arabia, a flawed incentive system that shifts risks to Israel, a threat to supply chain continuity and security by losing routes to the Far East, and unrealistic business assumptions coupled with an outdated fleet.

The ministry clarified that any future deal would require a reassessment of national shipping needs by the Shipping and Ports Authority and updated protections for vital interests secured by Zim's "golden share" held by the state. A new transaction would only be considered if it substantially reduces dependence on hostile entities, ensures independent maritime supply continuity, and presents a financially sound and stable long-term model.

The $3.7 billion deal was initially reported in February after a six-month bidding process. Zim, traded on the New York Stock Exchange, is expected to be delisted as part of the agreement, which would see Hapag-Lloyd absorb Zim's global operations, routes, and vessels. The Israeli government has held a golden share in Zim since its privatization.

Haifa Mayor Yona Yahav also voiced strong opposition, arguing that Zim is strategically vital to Israel's economy and security, employing thousands, many in Haifa. He called the sale to foreign entities, even with an Israeli fund intermediary, detrimental to national security and potentially leading to mass layoffs, urging the government to halt the transaction.