By: OrePulse

Israeli authorities have halted their review of Hapag-Lloyd's proposed $4.2 billion acquisition of ZIM Integrated Shipping Services, requiring the German container line to rework its proposal before resubmitting it for approval.

Israel's Government Companies Authority told ZIM on Tuesday that it had stopped evaluating the existing transaction structure, according to the Israeli outlet Calcalist. Officials said a materially different transaction would have to go back to the boards of all three parties — ZIM, Hapag-Lloyd and the Israeli investment firm FIMI — for approval before it could be resubmitted. The deal has not been formally terminated.

Opposition to the deal's current structure hardened after Israel's Finance Ministry formally recommended against approving it, citing risks it said had not been sufficiently addressed. The Prime Minister's Office separately said it was concerned that ZIM would remain operationally dependent on Hapag-Lloyd even though FIMI would hold the Israeli company's ownership stake.

In response to the concerns raised by officials, Hapag-Lloyd put forward a revised framework that preserved its original offer of $35 per share in cash while adding a series of commitments intended to address the independence concerns. These included a direct shipping service to the Far East operated specifically for ZIM Israel, enhanced safeguards tied to a golden-share arrangement, hiring additional Israeli seafarers, local control over vessel management, and access to vessels from Hapag-Lloyd's broader fleet. Under the revised offer, the Israeli-flagged fleet would comprise 16 ships.

ZIM's workforce rejected the revised terms, saying the concessions were not sufficient to guarantee the carrier's independent operation during future crises.

Hapag-Lloyd Chief Executive Rolf Habben Jansen said he continued to see strategic merit in combining the two carriers and said the company remained committed to making further adjustments to the proposal. The combined entity would operate more than 400 vessels with a total capacity of about 3 million twenty-foot equivalent units, and the two companies have estimated that the merger could generate annual synergies of $300 million to $500 million.

ZIM's board now faces a decision on whether to pursue a restructured version of the transaction with Hapag-Lloyd and FIMI, or to look for alternative buyers for the Israeli carrier.