AS FORESHADOWED yesterday Hapag-Lloyd has signed an agreement to acquire 100% of the shares in ZIM Integrated Shipping Services, but the carriers will remain competitors until the transaction closes, expected at the end of this year.
Analysts have expressed surprise at the price the German carrier is paying for its Israeli counterpart, now reported as US$4.2 billion — or a 58% premium to ZIM’s closing share price on 13 February — compared to yesterday’s estimates of 3.2-3.7 billion. But this is seen as the outlay necessary to outbid Maersk and to keep Hapag in touch with the global top four, MSC, Maersk, CMA CGM and Cosco.
In ZIM’s confirmatory announcement it said Hapag-Lloyd has entered into a binding memorandum of understanding with FIMI, under which the Special State Share held by the State of Israel in ZIM is intended to be transferred to a newly created subsidiary of FIMI, subject to approval by the State of Israel.
FIMI, headquartered in Tel Aviv, is the country's largest and leading private equity fund with more than $11 billion in assets under management and one of the largest private employers in the country. FIMI will create a new container-network operator and liner-service provider, "New ZIM", with owned tonnage, incorporated in Israel.
The new business, operating under the ZIM trademark, will be owned and run by FIMI, supported by a long-term strategic partnership with Hapag-Lloyd, which includes commercial support for the initial period to allow structured commencement of operations.
In addition to providing support to "New ZIM", Hapag-Lloyd expressed its intention to maintain a long-term presence in Israel and to retain ZIM employees.
For its part Hapag-Lloyd said once the merger is closed, “we aim to build a stronger, more seamless network and intend to operate a modern fleet of over 400 vessels with a capacity exceeding 3 million TEU — further reinforcing Hapag-Lloyd's position as one of the world’s leading container shipping companies.
“Together with ZIM, we plan to expand in attractive growth markets and enhance our services across key global trades — including Transpacific, Intra Asia, Atlantic, Latin America, and East Mediterranean.”
Reflecting on the values that unite both companies, Hapag CEO Rolf Habben Jansen said: “ZIM is an excellent partner for Hapag-Lloyd. We share the same ambitions: exceptional customer service, excellent operational quality, and a commitment to digital innovation — all powered by the expertise and passion of our people worldwide.”
"I am incredibly proud of the strategic transformation we have executed at ZIM over recent years, which has generated exceptional value for our shareholders," said Eli Glickman, ZIM's president and CEO.
"Since I joined the company in 2017, ZIM has progressed from a position of negative equity to become an industry leader with strong financial and operational performance. Since our IPO in January 2021, we have distributed an extraordinary US$5.7 billion in dividends to shareholders.
“Upon completion of this transaction, total capital returned will be approximately $10 billion, representing more than five times the company's initial market value five years ago, or approximately 45 times the capital raised at the IPO.
“Our agility and proactive decision-making have enabled us to implement critical strategies that position ZIM as a market leader in container shipping, with industry-leading EBIT margins and making ZIM a compelling acquisition target," Mr Glickman said
Hapag expects the closing of this transaction by the end of 2026. Until then, Hapag-Lloyd and ZIM will continue to operate independently, maintaining collaboration only within existing vessel-sharing and slot charter agreements. Additionally, Hapag-Lloyd will continue to build on its successful partnership with Maersk in the Gemini Cooperation.