Barloworld takeover by Zahid-led consortium becomes unconditional

The acquisition of Barloworld, a Johannesburg Stock Exchange-listed industrial conglomerate, by a consortium of investors led by Saudi Arabia’s Zahid Group has officially become unconditional, marking a major milestone in the transaction.

Barloworld is best known as the exclusive distributor of Caterpillar construction and mining equipment across Southern Africa. The company is now set to be acquired by Newco, a special-purpose vehicle formed for the transaction. Newco comprises Gulf Falcon Holding, a subsidiary of Zahid Group, and Entsha, an entity linked to Barloworld CEO Dominic Sewela.

Zahid Group is a diversified Saudi conglomerate with operations spanning construction, energy, manufacturing, travel, finance, hospitality, oil, and marketing services.

Barloworld shareholders have been formally notified that Newco’s R23 billion Standby Offer for the proposed acquisition has now become wholly unconditional. This follows the waiver of a key condition related to competition approval from the Common Market for Eastern and Southern Africa (COMESA), which was agreed upon by all parties on 1 October 2025.

With all conditions of the Standby Offer now fulfilled, Newco has secured valid acceptances for 77,595,744 Barloworld ordinary shares, representing approximately 41.6% of the company’s issued share capital (excluding treasury shares). When combined with shares already held by the consortium and the Barloworld Foundation, Newco now has support from 65.0% of the issued ordinary shares.

Sydney Mhlarhi, spokesperson for Newco, hailed the transaction as a vote of confidence in both Barloworld and South Africa’s economic outlook:

This landmark transaction reflects the consortium’s strong belief in the long-term potential of Barloworld and is a resounding endorsement of South Africa’s prospects. We urge shareholders who have not yet accepted the offer to act promptly.

Shareholder Concerns and Controversy

Despite the backing of a major international investor, the deal has not been without controversy. Earlier this year, MoneyWeb reported that two of Barloworld’s largest shareholders opposed the sale during a general meeting. Concerns were raised over a potential conflict of interest, given CEO Dominic Sewela’s involvement in Entsha, one of the acquiring entities.

The initial lack of majority shareholder support triggered the activation of the Standby Offer, which allowed Newco to proceed with the acquisition under alternative terms.

Barloworld has stated that, pending receipt of a compliance certificate from the Takeover Regulations Panel by 7 October 2025, the settlement of the offer will proceed according to a defined timetable, which is expected to be announced shortly.