Israeli ministries oppose Zim-Hapag-Lloyd US$4.2B merger, cite food security risks
The Ministry of Agriculture opposed the deal, citing concerns related to food security.
ISRAEL – Israel’s Ministry of Economy and Ministry of Agriculture have joined other government bodies opposing the proposed US$4.2 billion merger between ZIM Integrated Shipping Services and German shipping group Hapag-Lloyd.
Under the proposed transaction, Zim would be sold to Hapag-Lloyd and the FIMI fund, with a new entity, “Zim Israel”, intended to comply with Israel’s “golden share” requirements.
Strategic Risks and Maritime Independence
The Ministry of Economy stated that the proposed structure creates “a direct risk to maritime traffic and Israel’s economic and strategic interests.” The ministry also argued that “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.”
According to the ministry, 98% of Israel’s imports arrive by sea, while 90% of exports are shipped by sea. Zim currently accounts for approximately 22% of Israel’s full-container shipping market.
The Shipping and Ports Authority stated that “in its current form, the deal endangers Israel’s national interest in the fields of shipping and supply chains,” warning of “a cumulative loss of maritime independence, expertise, manpower and operational capability.”
Food Security Concerns
The Ministry of Agriculture opposed the deal, citing concerns related to food security. In its position paper, the ministry stated that “from the perspective of agriculture and food security, Israel’s dependence on maritime transport is almost absolute.”
In addition, the ministry noted that around 85% of Israel’s caloric intake is imported, either as finished products or as raw materials, including wheat and agricultural inputs such as fertilizers.
Zim controls approximately one-third of maritime food shipments to Israel. According to the Agriculture Ministry, “serious concerns arise regarding the future viability of Zim Israel,” particularly regarding the continuity of imports during emergency situations.
Proposed Structure and Opposition
Under the proposal, Zim Israel would operate 12 owned vessels and four chartered ships, compared with Zim’s current fleet of 99 vessels. Hapag-Lloyd and FIMI maintain that the proposed structure complies with the requirements attached to the state’s golden share and noted that Zim remains a publicly traded Nasdaq-listed company.
Zim shares are currently trading around US$25.5 per share, below the proposed acquisition price of US$35 per share.
As Israeli ministries formally challenge the deal, the outcome will determine whether commercial efficiency or maritime independence prevails in safeguarding the nation’s vital supply chains.
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