Israeli ministries join opposition to $4.2 billion Zim-Hapag deal
Economy and Agriculture ministries warn merger could threaten national security and supply chains.
The Ministry of Economy and the Ministry of Agriculture have joined the growing list of government bodies opposing the proposed merger between Zim and German shipping giant Hapag-Lloyd, Calcalist has learned. The two ministries are aligning themselves with the position already taken by the Shipping and Ports Authority and the Ministry of Transportation.
Under the proposed deal, Zim would be sold to Hapag-Lloyd and the FIMI fund for $4.2 billion. Israel’s “golden share” in Zim requires Israeli ownership and additional safeguards, which FIMI, controlled by Ishay Davidi, is expected to fulfill through the creation of a new entity, “Zim Israel.”
However, the proposed Zim Israel would be significantly smaller than the current company, operating just 12 owned vessels and four chartered ships, compared with Zim’s current fleet of 99 vessels.
An opinion submitted by the Ministry of Economy’s Foreign Trade Administration argues that the proposed structure poses “a direct risk to maritime traffic and Israel’s economic and strategic interests.” According to the document, “the bulk of Zim’s activity is being transferred to a German shipping giant partially owned by countries that do not maintain diplomatic relations with Israel, namely Qatar and Saudi Arabia, while the local activity is isolated within a new entity (Zim Israel), which, although Israeli-owned, lacks a profitable asset base that would allow it to survive economically beyond a few years.”
The ministry further warned that the transaction “empties the state’s golden share of its content and endangers the national interests it was designed to protect.” It also argued that splitting Zim into two separate companies could create “a crippled company unable to stand independently from a business and operational perspective.”
Referring to the holdings of Qatari and Saudi sovereign wealth funds in Hapag-Lloyd, the Ministry of Economy stated that “in the world of international shipping and logistics, strategic shareholders, particularly sovereign wealth funds, are not merely passive investors. Countries use infrastructure and economic holdings to create geopolitical leverage, including over supply chains and indirect pressure during crises.”
According to the ministry, 98% of Israel’s imports arrive by sea, while 90% of exports are shipped through maritime routes. Zim currently accounts for roughly 22% of Israel’s full-container shipping market, making any weakening of its national affiliation “a direct risk to the operational continuity of the entire economy.”
The Ministry of Agriculture also voiced opposition to the deal, arguing that it could threaten Israel’s food security. In an opinion signed by Yaakov Poleg, Deputy Director General for Foreign Trade and International Cooperation, the ministry stated that “from the perspective of agriculture and food security, Israel’s dependence on maritime transport is almost absolute.”
The ministry noted that approximately 85% of Israel’s calorie consumption is imported, either as finished products or raw materials such as wheat, along with essential agricultural inputs including fertilizers. According to the opinion, Zim controls roughly one-third of maritime food shipping activity to Israel.
The Agriculture Ministry warned that “serious concerns arise regarding the future viability of Zim Israel,” adding that the proposed structure could undermine Israel’s ability to import food and agricultural inputs during emergencies. “Even if the routes remaining under Zim Israel operate properly, there remains serious concern regarding the ability to maintain supply from the East in such scenarios,” the opinion stated.
Two weeks ago, the Shipping and Ports Authority formally opposed the deal. In an opinion signed by Shipping and Ports Authority Director Zadok Radker, the authority argued that “in its current form, the deal endangers Israel’s national interest in the fields of shipping and supply chains.”
According to the authority, “Zim Israel in its proposed form does not constitute a functional, strategic or national alternative to the existing Zim. It is a dependent and weakened entity, lacking control over core assets, without an independent solution for critical markets, and unprepared to ensure continuity of supply to the Israeli economy in both routine and emergency situations.”
The authority further warned that the transaction would create “a cumulative loss of maritime independence, expertise, manpower and operational capability,” while transferring “control and decision-making centers to a foreign entity without sufficient safeguards.”
It concluded that “any possible progress requires a fundamental and substantial change in the structure of the deal,” including “genuine Israeli control over core assets, independent access to critical markets, preservation and strengthening of maritime human capital, and an operational and economic safety net adapted to Israel’s unique risks.”
The Ministry of Transportation is expected to adopt a similar position.
Hapag-Lloyd and FIMI have repeatedly argued that the proposed Zim Israel structure complies with the requirements of the state’s golden share. They also maintain that rejecting the deal would be difficult given that Zim is a publicly traded company listed on the Nasdaq.
Still, Zim’s stock continues to trade well below the deal price, around $25.5 per share compared with the proposed acquisition price of $35, suggesting that investors remain skeptical that the transaction will ultimately be approved.
