Israeli Government Likely to Reject Sale of Zim to German Hapag-Lloyd and Pimi Fund
The Israeli government is expected to reject the proposed sale of shipping company Zim to the German firm Hapag-Lloyd and the Pimi investment fund, with key discussions and a formal hearing scheduled for September 9. The decision follows a delayed meeting of eight government bodies tasked with reviewing the deal, where a majority appear opposed to approval. The Shipping and Ports Authority (Respan), led by Tzadok Redkar, issued a second negative opinion last week, emphasizing concerns over effective control, economic independence, and the long-term sustainability of the new company structure.
The buyers, who agreed in February to purchase Zim for $4.2 billion, presented detailed commitments including the establishment of a new Israeli-focused Zim entity with 16 ships, 200 jobs, and a technological center employing 250-300 workers. They pledged to maintain regional third-party agent associations, provide joint services abroad, and guarantee job security for a decade. Despite these assurances and extensive documentation supporting the sale, Respan maintains that the new company would remain dependent on Hapag-Lloyd for access to international shipping networks and operational infrastructure, limiting its strategic and operational independence.
Government ministries including Defense, Economy, Agriculture, and especially Transportation, which rely on Respan's expertise, oppose the deal. The Treasury and National Security Council have yet to present official positions, though the Treasury's Accountant General is known to oppose the sale. The buyers claim they have had limited opportunities to present their case and suspect internal opposition from former Zim management and the workers' committee is influencing the government's stance.
Pimi's CEO, Issy Davidi, criticized Respan's position as based on incorrect assumptions and highlighted the improvements made to address concerns. He stressed that the new Zim would be a strong, independent Israeli company without foreign dependence. While Pimi does not plan legal action if the deal is rejected, Hapag-Lloyd may pursue judicial avenues, hoping a new government after upcoming elections will reconsider the matter more favorably.
