Why a Saudi consortium took over Barloworld – and what nearly stopped it
Saudi-led consortium moves closer to acquiring South African industrial giant Barloworld in a R23 billion deal.
A Saudi-led consortium has moved one step closer to acquiring South African industrial giant Barloworld in a R23 billion deal. The potential takeover, led by the Zahid Group, recently cleared a significant hurdle related to concerns over US trade law violations.
The consortium, comprised of Gulf Falcon Holding (a Zahid Group subsidiary) and Entsha (a company linked to Barloworld CEO Dominic Sewela), is offering R120 per share for the company. Barloworld, the exclusive distributor of Caterpillar equipment in Southern Africa, had previously disclosed a voluntary self-disclosure (VSD) to the US Commerce Department’s Bureau of Industry and Security (BIS) regarding potential export control violations.
Following a thorough internal investigation, Barloworld confirmed it found no violations of US sanctions. However, the probe did identify apparent violations of US export controls, which the company stated it is actively addressing. A report from law firm Dentons supported the findings, concluding that the facts identified do not constitute a violation of US sanctions. This finding was a crucial step, fulfilling a key condition of the standby offer.
Approvals and Remaining Conditions
The VSD report’s acceptance marks another success for the consortium, which has already secured unconditional approval from the competition authorities in both South Africa and Botswana.
The deal, however, still requires competition approval from COMESA in Angola and Namibia. The consortium has submitted the necessary filings and is working to secure these as soon as possible. The standby offer also hinges on two other conditions:
- No Material Adverse Change has occurred.
- No Superior Competing Barloworld Proposal has been completed.
Should regulatory approvals not be finalized by September 11, 2025, the long-stop date will automatically extend by three months.
The takeover has faced pushback from some shareholders, with concerns raised over a potential conflict of interest involving CEO Dominic Sewela’s involvement in the consortium. The failure to secure majority shareholder support at a general meeting triggered the standby offer process.
