State to oppose sale of Zim; hearing for FIMI and Germany's Hapag-Lloyd in September

The discussions at the end of which the state's decision will be made on whether to approve the sale of Zim to Germany's Hapag-Lloyd and the FIMI fund are expected to gain momentum in the coming month, with current estimates being that the deal will not be approved. Calcalist has learned that a meeting that was supposed to take place this week between the eight government bodies that are supposed to give their opinion on the deal has been postponed by a month and will take place, as of now, only on September 9.

At this meeting, a majority against approving the deal is emerging, and only after it will a hearing be held at the Government Companies Authority for Hapag-Lloyd and FIMI, for a final and conclusive presentation of their position in an attempt to change the decision. It was also learned by Calcalist that the head of the Shipping and Ports Authority (SPA), Tzadok Radker, sent a second opinion on the deal last week, in which he reiterated that it should not be approved. The SPA is the professional body on which most of the government bodies required to approve the deal rely, even if not formally.

The letter from the SPA was sent after Hapag-Lloyd, FIMI, and Zim itself sent a detailed presentation explaining the advantages of implementing the deal. The buyers, who signed in February for the purchase of Zim for $4.2 billion, presented Hapag-Lloyd's commitment to Zim Israel, which will be split from the international Zim and will hold 16 ships. The Germans committed to establishing a new Israeli area in Zim, with 200 jobs, and a technological center that will employ 250-300 full-time employees. The buyers also committed to maintaining an association of regional third-party agents in Israel, jointly providing services to other countries, and granting job security to employees for ten years.

The new Zim Israel, which will be separated from the current company whose operations will be merged into Hapag-Lloyd, was presented as a company whose 100% of operations will be focused in Israel compared to 25% today. The new Zim was also presented as a strong company with no debt at all, compared to a debt of $2.9 billion today, and as one that will provide a connection to a global network of regular shipping companies in major ports. The buyers transferred opinions supporting the sale from three sources: Ernst & Young, the consulting firm BCG, and Yigal Maor, former head of the Shipping and Ports Authority. The buyers received 174 questions from the eight government bodies, answered 120 of them, and provided 40 files, totaling 600 pages, to support their position.

The head of the SPA, Radker, determined in the new opinion, which reached Calcalist, that the additional information presented does not change the overall picture and does not provide a satisfactory answer to the essential issues that the Authority pointed out in the past. "The cumulative weight of the positive data presented is limited in relation to the fundamental issues concerning effective control, economic and operational independence, the sustainability of the company over time, and the preservation of the national interests underlying the special share (golden share). Therefore, the position of the Shipping Authority remains unchanged, and there is nothing in the additional information presented to indicate a change in the position conveyed in the past, and therefore there is no place to approve the deal in the existing format," it was stated there.

Radker noted positively a number of positive components that the buyers conveyed, including a commitment to continue employing existing Israeli sailors, alongside an intention to train additional Israeli sailors, as well as commitments for independent contracts of Zim with suppliers and ports and the operation of an independent and separate information system that Zim developed for the new company. But according to the SPA, "even after the additional information, a deep dependence of Zim Israel on a foreign factor that influences the activity of Zim Israel continues to exist. Control over capacity, access to the international line network, access to major markets, means of production, operational infrastructure, and commercial power centers remains in the hands of Hapag-Lloyd. Even if a separate Israeli company is established, it is difficult to see it as a factor with full strategic, business, and operational independence."