Why a German shipping deal alarms Israel’s government

What do we know about the deal?

Germany’s Hapag-Lloyd, the world’s fifth-largest container shipping line, has signed a deal to acquire its Israeli rival Zim Integrated Shipping Services for $4.2 billion (€3.5 billion).

The merger agreement was signed on Monday, following advanced talks. It was unanimously approved by Zim’s Board of Directors but needs the formal sign-off from Israel’s government, which holds special rights embedded in Zim’s founding charter.

The combined entity would operate a fleet of over 400 vessels with a capacity exceeding 3 million TEU (twenty-foot equivalent units) and an annual transport volume of more than 18 million TEU.

Zim is headquartered in Haifa, home to Israel’s main port, and has been listed on the New York Stock Exchange since 2021. As the world’s 10th-largest shipping firm, Zim operates a global network of container routes with its fleet.

The $35 per share offer represents a 58% premium over the $22.20 stock price on February 13, 2026. Zim shares soared by more than 30% on the announcement.

Why is the takeover so controversial?

Israel sees Zim as a strategic asset. Beyond being a commercial shipping line, it has long played a role in emergency logistics and national security planning. 

According to the Israel-based Who Profits research center, Zim also plays a key role in transporting US military aid shipments to Israel under a longstanding agreement. 

This makes the Israeli state reluctant to lose control over it, especially as it faces multiple vulnerabilities, including the Gaza conflict, ongoing tensions with Iran and wider regional instability.

Hapag’s plan involves carving up the Israeli carrier, separating its core container‑shipping operations from a smaller, Israel-focused entity which is owned by domestic private equity fund FIMI.

This move would allow Hapag to integrate Zim’s ships, routes and commercial contracts into its global shipping network, while FIMI would take over the remaining assets and obligations, often referred to as the Israeli state’s “golden share.”

Hapag said the new entity would retain the name Zim and have 16 modern vessels for strategic routes.

Hapag’s ownership includes passive stakes from Qatar (12.3%) and Saudi Arabia (10.2%), raising geopolitical concerns in Israel due to longstanding regional tensions and Qatar’s perceived ties to the Palestinian militant group Hamas.

What’s the reaction in Israel?

Haifa Mayor Yona Yahav told Reuters news agency that Zim is vital for Israel’s economy and security. He called on the government to halt the transaction.

Hapag insists the carve-out will allow the Israeli state to retain oversight of Zim’s governance, emergency logistics capacity and maritime services linked to national security.

But Israel’s port authority labeled the move an “existential threat,” fearing that splitting the company could leave the new Zim under-resourced and vulnerable to downsizing, without the profits from its commercial operations. 

This week, around 800 out of Zim’s 1,000 workers staged a strike in opposition to the takeover.

“We are no longer permitting any activities,” union representative Ziva Lainer Schkolnik explained on Tuesday. “We have halted several ships in the ports of Ashdod and Haifa.”

According to the union, the new Israeli spinoff is only expected to require around 120 staff, potentially putting up to 900 jobs in jeopardy.

Hapag has denied this, with a company spokesperson saying that jobs at Zim’s headquarters and in management are safe. 

Will the Israeli government approve the takeover?

It’s too early to say definitively. However, Israel’s Transportation Minister Miri Regev has taken a notably critical stance, threatening to block the sale and ordering an immediate review of the deal’s implications.

Regev wants her department to assess whether the government could intervene using its golden share.

Neither Israeli Prime Minister Benjamin Netanyahu’s office nor the finance or economy ministry has taken a public position on the acquisition. 

The carve-out was designed to address concerns about Zim’s strategic role, but it’s unclear whether it will smooth the sign-off process.

Final approval will require the input of about a dozen government bodies, including antitrust and foreign investment regulators and is expected to take about nine months.

How will Hapag-Lloyd benefit from the takeover?

Hapag expects annual synergies of €300 to €500 million through route optimization, cost savings and better scale.

The shipping industry is currently dealing with overcapacity and falling freight rates.

For the Hamburg-based firm, the takeover would also mark a major strategic expansion at a moment when its own earnings are under pressure.

The company reported provisional earnings before interest and tax (EBIT) of €1 billion for the 2025 financial year, down sharply from €2.6 billion in 2024.

Hapag’s CEO Rolf Habben Jansen said he hopes the transaction will be completed by the end of the year.

Earlier this month, the firm resumed voyages through the Red Sea and the Suez Canal.

Shipping firms had rerouted vessels over the past two years due to attacks by Yemen’s Houthi rebels, targeting freighters with links to Israel over the Gaza war.

Edited by: Ashutosh Pandey