The Competition Tribunal has officially approved the R23 billion (US$1.25 billion) acquisition of Barloworld Limited by a consortium led by Saudi Arabia’s Zahid Group, marking one of the most significant cross-border deals in South Africa’s industrial sector.
The deal, initiated in December 2024 through a newly formed entity known as Newco, will see Zahid Group’s Gulf Falcon Holding and South Africa’s Entsha take control of Barloworld, a century-old diversified industrial group and a major distributor of Caterpillar equipment across Africa.
A Tumultuous Road to Approval
The acquisition journey has been anything but smooth. Earlier this year, shareholders including the Public Investment Corporation (PIC) and London-based Silchester Asset Management rejected the consortium’s initial bid, citing governance concerns around the involvement of Barloworld’s CEO Dominic Sewela in the buying group.
However, Zahid Group pressed ahead with a “standby offer” strategy to secure a majority stake. The breakthrough came in April, when the PIC, Barloworld’s largest shareholder with nearly 22% equity, agreed to back the transaction—on condition that a broad-based Black Economic Empowerment (BEE) scheme be incorporated.
Competition Commission and Tribunal Conditions
In June, the Competition Commission recommended approval subject to empowerment conditions, and on August 18, 2025, the Tribunal gave its final nod. Under the terms, Newco must implement a 13.5% BEE ownership structure to ensure meaningful participation of historically disadvantaged South Africans.
This condition was a critical factor in securing approval, aligning the deal with South Africa’s wider transformation and public interest policies.
What the Deal Means
Once finalized, Barloworld is expected to be delisted from the Johannesburg Stock Exchange, bringing an end to its long history as one of South Africa’s most recognizable listed companies.
Analysts suggest the acquisition will strengthen Zahid Group’s position as a regional powerhouse in heavy machinery and industrial solutions, while also reinforcing Caterpillar’s distribution network in Southern Africa.
“This is more than just a transaction—it’s a realignment of industrial and economic partnerships across Africa,” said one Johannesburg-based investment analyst. “With Zahid’s backing, Barloworld is positioned to compete more aggressively on the continent.”
Next Steps
The focus now shifts to implementation. Zahid Group and its partners will need to finalize the empowerment structure and assure employees, clients, and regulators of a smooth transition.
Market observers will also be watching for the impact on jobs, suppliers, and South Africa’s construction and mining sectors—industries where Barloworld is a dominant player.
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