The Knesset Economic Affairs Committee on Sunday conducted a heated discussion questioning whether Israel’s national strategic interests will be served if the government agrees to a proposed sale of local Zim Integrated Shipping Services to German shipping giant Hapag-Lloyd.

The discussion comes a week after Hapag-Lloyd signed an agreement, alongside Israeli private equity fund FIMI Opportunity Funds, to buy the Haifa-based shipping rival, Zim, in a deal worth $4.2 billion. As part of the deal, FIMI will take ownership of a portion of Zim’s business related to the shipping firm’s Israel operations and form “New Zim.”

With a fleet of 16 vessels, the Israeli container shipping company will be created to serve global trade routes into Israel, mainly between the Eastern Mediterranean and the US. Hapag-Lloyd will take control of Zim’s international operations, including shipping routes between East Asia and the Americas, and between Asian ports.

During the discussion, MK Oded Forer, who initiated the committee meeting, and other participants raised concerns about Israel’s dependence on foreign-owned shipping for critical trade routes, especially during emergencies. Among Hapag-Lloyd’s shareholders are Qatar Holding, a subsidiary of Qatar’s sovereign wealth fund, which owns a 12.3 percent stake, and Saudi Arabia’s Public Investment Fund, which has a 10.2% stake.

Forer said that the structure of the deal raises serious questions about whether a slim and small new Zim will be able to fulfill the national responsibility of an Israeli shipping company.

“Zim is not........

© The Times of Israel