Hapag-LLoyd to acquire ZIM in $4.2 BN cash deal

More consolidation in the container shipping business: Hamburg-headquartered Hapag-Lloyd and Haifa, Israel-headquartered ZIM Integrated Shipping Services Ltd have signed an agreement under which Hapag-Lloyd will acquire 100% of ZIM’s shares for a consideration of $35.00 per share in cash. The total transaction value amounts to over $4.2 billion.

Israeli private equity fund FIMI will take ownership of a carved-out 16-ship container liner business that, says Hapag-Lloyd, “will serve some of the most important strategic trade-lanes, seamlessly connect to the global network of Hapag-Lloyd and in combination enhance and secure the global maritime connectivity for the State of Israel. “

Hapag-Lloyd has entered into a binding memorandum of understanding with FIMI, under which the Israeli state’s “golden share” in ZIM will be transferred to a newly created subsidiary of FIMI, subject to approval by the State of Israel. FIMI will create a new container-network operator and liner-service provider, “New ZIM”, with owned tonnage, incorporated in Israel. The new business, operating under the ZIM trademark, will be owned and run by FIMI, supported by a long-term strategic partnership with Hapag-Lloyd.

The deal would secure Hapag-Lloyd’s market position as the fifth-largest container shipping company worldwide with a modern fleet of over 400 vessels, a standing capacity of over 3 million TEU, and an annual transport volume of more than 18 million TEU.

“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. We will use this opportunity to create the best team from the exceptional talent in ZIM and Hapag-Lloyd – in Israel and around the globe – and we commit ourselves to build a very substantial and long-term presence in Israel. Together, we will set new benchmarks of excellence and secure our position as the undisputed number one for quality in our industry.”

“Today’s announcement is the culmination of a thorough strategic review conducted by ZIM’s board of directors dedicated to maximizing shareholder value. The decision reflects a comprehensive evaluation of all available options to ensure the best possible outcome for the company’s investors. We believe that it represents the most prudent and beneficial transaction for all ZIM stakeholders that further advances the tremendous value creation track record that we have established since our IPO,” said Yair Seroussi, chairman of ZIM’s board of Directors.

“I am incredibly proud of the strategic transformation we have executed at ZIM over recent years, which has generated exceptional value for our shareholders,” said Eli Glickman, ZIM’s president and CEO. “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 $5.7 billion in dividends to shareholders. Upon completion of this transaction, total capital returned will be approximately $10 billion, representing more than five times the company’s initial market value five years ago, or approximately 45 times the capital raised at the IPO.”

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