Hapag-Lloyd is working with the Israeli Government on improvements to its proposed $4.2 billion cash purchase of ZIM Integrated Shipping Services, the German shipping group said on Monday.
The proposed deal has faced heavy opposition in Israel, including ZIM's workers, Defence Minister Israel Katz and other government officials, who argue that it undermines national security by transferring Israel's shipping to a foreign company.
"We are now developing an improved proposal designed to further strengthen Israel's maritime security and independence," said Hapag-Lloyd CEO Rolf Habben Jansen.
"The revised proposal will secure Israel's access to key shipping routes, including routes from Asia," Habben Jansen added in a statement.
Hapag-Lloyd, which aims to secure its position as the world's fifth-largest shipping group, said that the deal would establish ZIM as a fully Israeli-controlled container shipping company owned by Israeli private equity fund FIMI.
In a related deal, FIMI plans to acquire a business with 16 vessels carved out from ZIM that secures direct global maritime connections for Israel through a new company called ZIM Israel.
Hapag-Lloyd said it had held a number of rounds of meetings with Israeli officials that included the economy, finance and defence ministries, "to revise structural elements of the proposed acquisition", which is expected to be submitted to Israel's cabinet later this month.
Israel holds a "golden share", which gives Israel special ownership rights in ZIM.
"The agreement will also prevent any foreign interference in the transportation of Israel's sensitive cargo, representing a significant improvement over the current arrangement," Habben Jansen said.
Chairman of the ZIM Workers' Committee, Oren Caspi, said he remained opposed to the proposed tie-up on the grounds that ZIM should not be handed over to "hostile parties".
Currently, up to 24 per cent of ZIM's shares can be sold to a single foreign investor without prior notice to Israel's government. Hapag-Lloyd has proposed reducing the threshold to 10 per cent to prevent foreign influence.
For its part, FIMI committed to not list ZIM Israel's shares for trading outside of Israel's stock market.
Hapag-Lloyd said the parties involved had agreed to strengthen shipping connections between Israel and Asia at the request of Israeli authorities.
(Reporting by Steven Scheer; Editing by Alexander Smith)