Israeli Economy Minister Backs ZIM Sale to Hapag-Lloyd

Israeli Economy Minister Nir Barkat has signaled a potential shift in his stance on the sale of Israeli shipping company ZIM Integrated Shipping Services, instructing his ministry's professional staff to hold follow-up meetings with German company Hapag-Lloyd and Israeli fund FIMI. These meetings are scheduled to take place after the Sukkot holiday.

Barkat's apparent change of heart follows his conviction that the deal, valued at approximately $4.2 billion, can be approved, contrary to the ministry's earlier reservations. The professional staff had initially opposed the sale in May, joining objections from the Ministries of Agriculture and Transportation. Concerns at the time included potential future relations between the company and countries like Qatar.

The proposed deal involves Hapag-Lloyd acquiring ZIM for $35 per share in cash. FIMI would then manage the Israeli operations through a new entity, "ZIM Israel," under arrangements related to the state's golden share. This new Israeli company would be significantly smaller than the current ZIM, operating 12 ships and chartering four, compared to ZIM's current fleet of 99 vessels.

Previously, the Economy Ministry's professional staff warned of potential risks to navigation and economic and strategic interests, given that a significant portion of ZIM's operations would transfer to a German company with ownership links to countries including Qatar and Saudi Arabia. However, FIMI's chairman reportedly believes the current ZIM structure is more exposed to influence from these nations due to the absence of a controlling shareholder.

Following consultations with defense establishment security officials, Barkat reportedly became convinced the deal poses no security risk. He has requested further data regarding the financial stability and long-term viability of the new, smaller Israeli entity. Approximately 200 ZIM employees are expected to leave with generous compensation packages, though the workers' committee strongly opposes the deal.

Eight government bodies are expected to submit their positions to the Government Companies Authority by the end of the month. If consensus is not reached, the matter will be escalated to the government for a decision. ZIM shareholders have already approved the sale by over 97%, but regulatory approvals in Israel are still pending.