Hapag-Lloyd's buyout offer for Zim is hindered by Israeli regulations and Arab state ownership, complicating potential negotiations.
Zim Integrated Shipping Services has received a buyout offer from Hapag-Lloyd; however, Israel's special shareholding and Arab state ownership in the German carrier make a deal unlikely, according to New York's Journal of Commerce.
Israeli newspaper Globes reported that Zim's board is currently reviewing strategic options, including a potential sale. Offers have been made by Hapag-Lloyd as well as Zim's chief executive, Eli Glickman.
Employee groups at Zim oppose a deal with Hapag-Lloyd due to the combined 22 percent stake held by Saudi Arabia and Qatar's sovereign wealth funds in the Hamburg-based line. This stake originated from Hapag-Lloyd's 2016 acquisition of United Arab Shipping Company.
Hapag-Lloyd declined to comment on the report from Globes, stating that the company does not respond to market rumors. Additionally, Globes noted that Mediterranean Shipping Company and Maersk have also expressed interest in Zim.
A U.S.-based Zim executive told the Journal of Commerce that a deal with Hapag-Lloyd has a "zero percent chance" of success due to the Saudi and Qatari ownership. The executive indicated that only a purchase by Mr. Glickman appears realistic.
Zim's governance rules further complicate any potential sale. When the carrier was privatized in 2004, Israel retained a special share, granting the government access to Zim's fleet in emergencies and requiring approval for mergers or sales.
This special share also mandates that Zim's chief executive and most directors be Israeli citizens and that the company remain incorporated in Israel, as outlined in its latest annual report.
