Hapag-Lloyd inks US$4Bn acquisition of ZIM

Hapag-Lloyd has reached an agreement with ZIM Integrated Shipping Services (ZIM), that will see Hapag-Lloyd acquire 100% of ZIM’s shares for a consideration of US$35 per share in cash.

The total transaction value amounts to over US$4Bn, but leaves a carved-out, 16-vessel container business for the share in ZIM, known as the Golden Share, held by the State of Israel. FIMI, Israel’s largest private equity fund, will take ownership of a carved-out container liner business.

In a press conference Hapag-Lloyd described the ’Golden Share’ as a non-transferable, non-voting share, held by the Israeli Minister of Finance & Transport, with the right to veto key corporate actions.

An earlier statement from Hapag-Lloyd had informed the market that the company was in “advanced negotiations regarding a potential acquisition of all shares in its Israeli competitor”, ZIM.

It added, “Furthermore, the consent of the State of Israel based on its special rights outlined in the articles of association of ZIM is required. In this context, negotiations with FIMI Opportunity Funds, an Israeli financial investor, for the assumption of the obligations under these special rights are well advanced.”

The completion of the transaction requires additional regulatory approvals and the consent of the shareholders’ meeting of ZIM.

The business combination of Hapag-Lloyd and ZIM 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.

Container shipping expert and Vespucci Maritime chief executive Lars Jensen commented on LinkedIn that, based on Alphaliner figures, this will increase Hapag-Lloyd’s global market share from 7.0% to 8.8%.
He said that once a deal was in place, it would have a “negative competitive impact on MSC and a positive impact on Gemini, especially in the Pacific trade. MSC and ZIM presently have vessel-sharing agreements in place on six Transpacific services. After the takeover is completed, the current ZIM volumes would move onto the Gemini network”.

He added that presently, 39% of the Hapag-Lloyd fleet is chartered. The deal would bring this up to 52% chartered vessels in the combined fleet.