The Israeli Ministry of Defence (MOD) has expressed opposition to the proposed takeover of local shipping company Zim Integrated Shipping Services by Germany's Hapag-Lloyd.
In a statement released on Sunday, July 5, Defence Minister Israel Katz said the sale of Zim to Hapag-Lloyd, “does not allow for the preservation of the security interests of the State of Israel.”
Katz's statement was issued amid local media reports quoting Prime Minister Benjamin Netanyahu as saying that the acquisition of Zim is not currently on the Israeli Government's agenda.
If completed, the US$4.2 billion deal would see Hapag-Lloyd acquire Zim's international routes and most of its ships, many of which are operating under long-term charters.
Local media outlet Calcalist reported that the MOD's fears stem from the possibility that Zim's routes to and from the United States and the Far East would be impacted by the takeover, thus affecting Israel's imports of weapons and related equipment.
The transaction would have also led to the creation of a new container liner company named New Zim. However, the MOD has expressed concern that New Zim's routes, which would be served by 16 vessels, would not extend beyond the Mediterranean, thus preventing it from continuing to serve Zim's existing routes linking Israel to the US and the Far East.
