By Dominic Chopping

Hapag-Lloyd is buying Israeli competitor Zim Integrated Shipping Services for $4.2 billion, as flagged Sunday.

The German shipping company said Monday that it signed a deal to buy Zim for $35.00 a share in cash, following approval by both parties. The price is a 65% premium to Zim's closing price of $21.18 on Friday.

Hapag said the deal will be funded from cash reserves and external financing of up to $2.5 billion.

It said Sunday that the board was in advanced talks to buy all shares in Zim but at that time the required approvals by the management board, supervisory board and corporate bodies hadn't been granted.

The deal is expected to complete by the end of this year, Hapag said.

Zim is considered a strategic asset for Israel so the state holds a "golden share" in the company, giving it control over certain strategic decisions such as ownership.

Hapag-Lloyd has therefore agreed with FIMI Opportunity Funds to form a company controlled by the private-equity group to assume the obligations arising from the special state rights. Under the agreement, twelve ships and the assets required for the operation of three trade routes are to be transferred from Hapag-Lloyd or ZIM to the new company.

Any deal will require the consent of the state of Israel, Zim shareholders and regulators.

The move comes after Zim appointed an independent board that has spent the last several months conducting a strategic review to assess a range of options, including a sale of the company, capital allocation options and other measures to maximize shareholder value.

The review was prompted by a revised takeover proposal from the company's chief executive, Eli Glickman, and Israeli businessman Rami Ungar. The approach was rejected as it was deemed as undervaluing the company, but Zim has previously disclosed that it had received takeover proposals from several other parties.

Zim recently reported a sharp drop in third-quarter earnings as freight rates tumbled and container volumes slipped, with the company warning that fourth-quarter conditions had weakened.

CEO Glickman had cautioned that the company was navigating a volatile rate environment with frequent changes in tariff policies and continuing global trade tensions, creating a market environment marked by more frequent and acute disruptions and fluctuations than in the past and prompting it to adapt its transpacific network.

Zim operates a fleet of around 129 ships according to a recent investor presentation. It has a charter-intensive fleet model, which means it leases or charters a large portion of its vessels, allowing it to adjust capacity as market conditions evolve. At the same time, the company has steadily increased the proportion of owned or long-term chartered vessels, which it says improves fleet quality and reduces exposure to short-term charter volatility.

Zim is listed on the New York Stock Exchange, with a market value of $2.7 billion as of Friday's close.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

February 16, 2026 09:56 ET (14:56 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.