Hapag-Lloyd and FIMI Submit Framework of Revised Structure for Zim Israel
Israeli media is reporting that Hapag-Lloyd CEO Rolf Habben Jansen flew to Israel and that, today, September 24, with Ishay Davidi’s FIMI Opportunity Funds, they submitted what they are calling a “significantly improved framework” for their proposed takeover of container carrier Zim. The companies are saying they understood the concerns raised by factions within the Israeli government and that they have addressed the issues, creating a stronger Zim Israel as the surviving Israeli company.
The Israeli government had indicated that it would vote to reject the proposed takeover of Zim by Hapag-Lloyd and the creation of a new, smaller Zim run by FIMI. Questions were raised about the financial viability of the new, smaller shipping company that was mostly focused on the Mediterranean and as a feeder to Hapag-Lloyd. Security concerns were also raised over Israel’s control of the shipping company and ability to maintain key supply chains.
The information submitted today is said to be a framework that outlines what the companies are calling “ten material improvements” to the structure of the deal. The companies said they would submit complete documentation within 45 days.
The Israeli outlet Calcalist, which was first to break the news of the pending takeover months ago, reports it reviewed the document submitted today. It says the new proposal enhances the Israeli ownership of Zim Israel and strengthens the so-called Golden Share. It reduces the threshold to trigger a government review and ensures that Zim Israel will remain an Israeli company.
One of the key objections was the limited routes for the new Zim. The revised proposal adds a weekly route to the Far East for Zim Israel in addition to the planned service in the Mediterranean and trans-Atlantic. It also proposed to increase the size of the Zim Israel fleet, doubling its current reefer capacity to protect the Israeli food chain.
Hapag-Lloyd will enter into a long-term commercial agreement with Zim Israel, providing it guaranteed global access.
Zim Israel will maintain its vessel management and professional expertise in Israel. It will also have an independent IT system in Israel.
FIMI reports that, as part of the submission, it will present a new business plan for Zim Israel, which was reportedly validated by independent international consultants. Calcalist reports the plan projects increasing Zim Israel’s revenues over 10 years by $1.7 billion and a $200 million improvement in net operating profit.
International lawyers are also said to have reviewed Hapag-Lloyd’s corporate governance and will submit an opinion as part of the revised information packet. One of the concerns that had been raised related to the investment in Hapag by Arab sovereign wealth funds. The report says Hapag is also highlighting that it has maintained its service to Israel consistently since October 2023, despite periods of severe security disruptions.
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To address issues raised by the unions in Israel, the deal is reported to include a special collective agreement guarantee for continued employment and training of Israeli seafarers. There is also a “10-year safety net,” enhanced terms for voluntary retirement, and a commitment to avoid layoffs through the end of 2027.
The Israeli media outlet Globes, however, highlights that the valuation of the proposed deal remains the same at $4.2 billion or $35 per share of Zim. It notes that the parties had a goal of closing the deal by the end of 2026, but it is now likely to extend until mid-2027.
