US$4bn deal would make global shipper fifth largest in the world
Hapag-Lloyd has confirmed it has signed an agreement with Zim Integrated Shipping Services, the world’s 10th largest container shipping line, to acquire 100 per cent of its shares with the total transaction value amounting to over US$4bn.
The acquisition will secure Hapag-Lloyd’s market position as the fifth-largest global container shipping company with a modern fleet of over 400 vessels, a standing capacity of over 3mn TEU, and an annual transport volume of more than 18mnTEU.
Zim’s shares leapt 50 per cent following the confirmation, according to a report from Reuters, while Hapag-Lloyd shares fell by 8 per cent.
“Zim is an excellent partner for Hapag-Lloyd,” said Rolf Habben Jansen, CEO of Hapag-Lloyd. “Customers will benefit from a significantly strengthened network on the Transpacific, Intra Asia, Atlantic, Latin America and East Mediterranean. We share the same ambitions: great customer service, outstanding operational quality, and a commitment to digital innovation – all powered by the expertise and passion of our people worldwide.”
Habben Jansen added that Hapag-Lloyd would use the opportunity to create the best team from the exceptional talent in both companies.
“We commit ourselves to build a very substantial and long-term presence in Israel,” he said. “Together, we will set new benchmarks of excellence and secure our position as the undisputed number one for quality in our industry.”
In connection with the transaction, Hapag-Lloyd has also entered into an agreement with FIMI, Israel’s largest and leading private equity fund. Once approved by the State of Israel, the agreement will see Hapag-Lloyd transfer the Special State Share held by the State in Zim to a newly created subsidiary of FIMI.
The new container line will start with 16 modern, sizeable, and efficient vessels and take over full responsibility for Zim’s Golden Share as well as the Zim brand.
Ishay Davidi, founder and CEO of the FIMI Funds said FIMI believes in the strategic importance for the State of Israel to maintain an independent Israeli shipping company.
“We will create a stable Israeli company, the new Zim, and view Hapag-Lloyd as a significant strategic partner for its on-going operations,” Davidi said.
“New Zim will integrate significant transatlantic capabilities, alongside additional shipping routes to Europe, Africa, the Mediterranean Sea and the Black Sea, supported by advanced global maritime transport capabilities, while continuing to place the customer at the centre of its operations. New Zim will work to provide its customers with the highest level of service. FIMI intends to leverage its experience and strategic capabilities to lead New Zim toward stable operations and uncompromising quality, while maintaining a deep commitment to its employees, suppliers and customers.”
Zim’s president and CEO Eli Glickman said he was incredibly proud of the strategic transformation Zim had executed over recent years.
“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$5.7bn in dividends to shareholders. Upon completion of this transaction, total capital returned will be approximately US$10bn, representing more than five times the company’s initial market value five years ago, or approximately 45 times the capital raised at the IPO.”
The deal has caused Zim staff to call a strike, according to Reuters. The company told the publication it was called on 15 February at the company’s headquarters in Haifa and was still ongoing. It said management was in talks with their union to avert any negative impact.
