Saudi Consortium Secures Approval to Acquire Barloworld for R23 Billion

Barloworld, the South African industrial giant and exclusive distributor of Caterpillar construction equipment in Southern Africa, is poised for a major transformation. A consortium led by Saudi Arabia’s Zahid Group has received approval from the Competition Tribunal to acquire the company for R23 billion, a deal that will see Barloworld delist from the Johannesburg Stock Exchange (JSE).

New Ownership, New Horizons

The acquisition involves Newco, a partnership comprising Gulf Falcon Holding, a subsidiary of the Zahid Group and Entsha, a company linked to Barloworld CEO Dominic Sewela. Zahid Group brings a diversified portfolio, including construction, energy, manufacturing, and hospitality, signaling a potentially significant expansion for Barloworld under its guidance.

Sydney Mhlarhi, spokesperson for Newco, expressed optimism about the deal’s impact on South Africa. “We maintain our firm belief that this transaction is a win for South Africa and ensures Barloworld’s long-term sustainability,” Mhlarhi said, emphasizing both shareholder value and broad-based economic benefits.

Public Interest Conditions and Black Economic Empowerment

The Tribunal’s approval comes with important public interest conditions, including the rollout of a broad-based black economic empowerment (BEE) structure post-delisting. This is seen as a crucial move to ensure the transaction contributes meaningfully to local economic transformation.

Shareholder Reactions and Standby Offer

The deal has not been without controversy. At a recent general meeting, two of Barloworld’s largest shareholders opposed the acquisition, raising concerns over CEO Sewela’s potential conflict of interest. As a result, the Standby Offer remains open, allowing shareholders who did not tender their shares initially to participate. The offer is expected to close in September 2025, with detailed timelines set for the release of results and fulfillment of remaining conditions.

While the deal awaits finalization, including competition approvals in other jurisdictions—it marks a pivotal moment for South Africa’s industrial sector. Analysts are watching closely, particularly regarding how the new ownership structure will balance commercial interests with local empowerment commitments.

Social media has already started buzzing, with investors debating the merits of the acquisition and the role of CEO Sewela in facilitating the deal. Many are optimistic about the infusion of international expertise, while others remain cautious about potential governance and conflict-of-interest concerns.

As Barloworld prepares to enter a new chapter, the R23 billion deal underscores the delicate balance between global investment and local economic transformation in South Africa’s evolving industrial landscape.

{Source: BusinessTech}

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