Union and Lawmakers Challenge Hapag ZIM Deal

Resistance to Hapag-Lloyd’s proposed acquisition of Israeli carrier ZIM is intensifying, with labor unrest mounting and the transaction coming under scrutiny in the Knesset, Israel’s parliament.

The German shipping group announced a $4.2 billion bid for ZIM last week in a structure that would see the creation of a separate entity, referred to as “New ZIM.” This new company would consist of 16 vessels carved out from the broader takeover and placed under the control of Israeli private equity firm FIMI.

Over the weekend, ZIM employees significantly curtailed port operations and prevented chairman Yair Seroussi from entering company facilities, escalating their protest despite assurances from Hapag-Lloyd that jobs would be protected for a defined period. The union stated it would cut by half the number of exceptional activities approved, including the discharge of ships carrying agricultural goods, and barred Seroussi from accessing ZIM sites in Haifa, Holon, and Ashdod. Earlier statements from union representatives had warned they would “paralyse” ZIM if necessary.

At the same time, lawmakers raised concerns about potential national security implications during a Knesset committee session examining the proposed sale. Committee members questioned whether a reduced New ZIM would be capable of fulfilling the carrier’s logistical responsibilities during times of conflict.

Debate intensified after members of parliament highlighted that major shareholders in Hapag-Lloyd include Qatar Holding and Saudi Arabia’s Public Investment Fund.

The ZIM workers’ committee emphasized the company’s strategic importance, stating: “ZIM has been a vital conduit for ammunition, food and medical supplies since October 7, 2023.”

ZIM currently operates under a so-called golden share arrangement that mandates a domestic presence and ownership of at least 11 Israeli-flagged vessels. Under the proposed structure, this golden share would be transferred to FIMI. As a result, the Knesset has asked the Israel Companies Authority to review whether New ZIM would meet the required legal conditions and maintain operational readiness at a national level.

FIMI founder Ishay Davidi told the parliamentary committee that New ZIM would be financially sound, stating: “New ZIM would be solvent from day one and meet state requirements.” Nevertheless, legislators and defense officials called for clearer guarantees, including detailed contingency plans, commitments regarding vessel flagging, and confirmation that New ZIM could be swiftly mobilized in the event of a national emergency.

Hapag-Lloyd expects the transaction to be finalized by the end of the year. If completed, the merged entity would operate more than 400 ships, with total capacity exceeding 3 million TEU and projected annual volumes surpassing 18 million TEU by 2027.