In its response to the Director of the Government Companies Authority, the Ministry of Finance expressed opposition to the sale of ZIM Integrated Shipping Services (NYSE: ZIM). The position paper said, "it is evident that the deal entails a series of material risks that are not adequately addressed in the existing agreements - as detailed at length in our position - and it is therefore recommended not to approve the deal in the current framework presented."
In a 33-page document, the Ministry of Finance outlined its detailed objections to the deal, which would effectively split Zim into two companies: the global arm - to be held by Hapag-Lloyd, comprising the chartered vessel fleet and international trade routes that do not call at Israeli ports (representing the majority of Zim's operations) - and the Israeli arm - to be held by Israeli private equity firm FIMI Opportunity Funds, which would take over operations for routes calling at Israeli ports, the Haifa headquarters, the Israeli workforce (61 sailors and 80-120 essential shore-based employees), and responsibility for compliance with the Golden Share provisions (the State's special share). This company would receive at least 16 vessels.
According to the Ministry of Finance, the deal presents a number of risks: structural dependence on Hapag-Lloyd, given that Zim Israel is not being established as a fully independent shipping company; An incentive-related issue regarding the FIMI fund, as the deal structure entails FIMI investing no equity at the time of inception and acquiring the company without an immediate cash outlay, thus severing the alignment of interests between the owners and the company's success; optimistic assumptions in the business forecast that - according to the Ministry of Finance - disregard the sector's high volatility and the fact that price levels are susceptible to geopolitical shocks; a loss of economies of scale, given that the Israeli company would operate relatively aging vessels while the global shipping industry shifts toward new technologies; and the involvement of hostile shareholders, considering that the Qatar government (12.3%) and Saudi Arabia (10.2%) hold stakes in Hapag-Lloyd.
In this context, the Ministry of Finance insists, "There is a genuine concern that this foreign influence could be exploited during political or diplomatic crises to disrupt operations serving Israel or to exert foreign pressure, akin to foreign influence attempts identified in similar cases involving foreign companies"; as well as an additional risk regarding the absence of an independent route to East asia, which runs counter to the state's trade diversification strategy.
Ministry of Finance: Safeguarding Israeli Interests first
The Ministry of Finance concluded, "As a body responsible for state policy, it is our duty to ensure that such a deal guarantees the preservation of the State of Israel's vital interests, on both the long-term financial stability of ZIM and the elimination of its dependence on entities hostile to Israel.
"The Ministry of Finance's primary concern is that the current definition of the state's vital interests may not stand the test of time. It argues that "to safeguard the state's interests in ZIM, the Administration of Shipping and Ports must immediately conduct a staff review to determine Israel's shipping-related needs and interests, and to examine potential changes to the definition of the state's vital interests in the company and the rights conferred by the 'golden share'."
Additional concerns stem from the ownership structure and the characteristics of the fleet to be transferred to ZIM Israel. "This gap is reflected in the state's inability to ensure effective Israeli control, oversee changes in ownership and management, and guarantee the maintenance of a fleet suited to national needs over time, alongside the long-term retention of an Israeli workforce."
The Ministry of Finance says the deal creates a small company that will be heavily dependent on Hapag-Lloyd for its ongoing operations and success. While Zim Israel will buy 16 ships, 12 of which will be owned outright, along with the brand, employees, and existing operations, and is set to begin activity free of financial debt and without paying immediate consideration for the vessels and assets, its ability to transform these assets into an independent, competitive, and sustainable shipping company appears, in our view, to have a low probability of success.
Just moments before the embargo on the Ministry of Finance's announcement was set to expire, the Prime Minister's Office also announced its opposition to the Zim deal.
"The new proposal addresses the issues"
German shipping company Hapag-Lloyd and its Israeli partner, the FIMI fund, submitted the outlines of an improved proposal to the Israeli government last Thursday for the acquisition of the shipping company Zim. The proposal includes improvements to the deal's components but does not alter the price. Hapag and FIMI seek to acquire ZIM at a valuation of $4.2 billion ($35 per share).
According to the company's announcement, the proposal addresses issues raised during discussions with Israeli authorities - particularly regarding security considerations - and is designed to "strengthen Israel's maritime independence, national security, and the resilience of its supply chain infrastructure."
Hapag-Lloyd and FIMI stated that they would finalize the business plan and the full legal framework for the deal over the next 45 days. During this period, executives from Hapag-Lloyd and FIMI intend to hold a series of meetings in Israel with relevant authorities and government ministries to present the improvements and discuss the details of the revised deal.
The ZIM deal was originally scheduled to close by the end of the year; while the review of these changes could lead to further delays in completion (especially given the election period). The agreement's validity can be extended until mid-2027.
Published by Globes, Israel business news - en.globes.co.il - on September 28, 2026.
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