In a transformative deal valued at over $3.5 billion, Israeli shipping giant ZIM has been sold to Germany's Hapag-Lloyd and Israeli private equity firm PIMI fund, marking the end of ZIM's operations as previously known. The agreement, finalized last night, will result in ZIM's delisting from Wall Street trading, with its activities split between Israel-related shipping lines and international routes that bypass Israel. This structure is expected to secure approval from Israeli regulators, including the Ministry of Defense, which holds a significant "golden share" in the company.
ZIM, which went public on Wall Street in 2021 at a valuation of $1.5 billion, currently trades at a company value of $2.5 billion. The sale price exceeds its market valuation, reflecting strong interest in the shipping sector. Among the competing bids was a group of investors led by ZIM's CEO Eli Glickman, who reportedly offered lower amounts than the winning consortium of Hapag-Lloyd and PIMI.
The transaction is unconventional, diverging from a standard acquisition where shares are simply divided among buyers. Instead, it involves a deliberate split of ZIM's operations to navigate regulatory hurdles, ensuring compliance with Israeli oversight requirements.
Hapag-Lloyd's shareholder base includes investors from Saudi Arabia holding approximately 10% of its shares and from Qatar with about 12%. Such ownership stakes would likely have doomed a full acquisition to regulatory rejection in Israel due to national security concerns. Consequently, Hapag-Lloyd will acquire only ZIM's international lines that do not pass through Israel, integrating them into its global operations.
The Israel-centric operations—those routes arriving in and departing from Israeli ports—will be sold to PIMI fund. This division is seen as theoretically more palatable for Israeli regulators, as these lines are critical for maintaining Israel's maritime lifeline to the world, particularly during emergencies.
Israeli authorities, including the Ministry of Defense, play a pivotal role in approving deals involving ZIM owing to the state's strategic "golden share," which grants veto power over key decisions. Analysts anticipate that this bifurcated sale structure will facilitate swift regulatory green lights, preserving national interests while allowing ZIM's expansion under new ownership.
