Zahid Group's acquisition of Barloworld, valued at $1.25 billion, receives the nod for approval
ZAR 23 Billion Acquisition of Barloworld by Zahid Group Approved by Competition Tribunal
The South African Competition Tribunal has conditionally approved the ZAR 23 billion (USD 1.3 billion) acquisition of Barloworld Limited by a consortium led by Saudi Arabia’s Zahid Group. This deal involves a new entity called Newco, consisting of Gulf Falcon Holding (a Zahid Group subsidiary) and Entsha (linked to Barloworld’s CEO Dominic Sewela and former executives).
The acquisition marks a major transformation for Barloworld, a century-old diversified industrial group and a major distributor of Caterpillar equipment across Africa. Zahid Group’s diverse portfolio in construction, energy, manufacturing, and hospitality signals a potential strategic expansion and long-term sustainability for Barloworld under new ownership.
Key conditions set by the Tribunal include:
- The implementation of a broad-based black economic empowerment (BEE) structure after Barloworld’s planned delisting from the Johannesburg Stock Exchange (JSE) and A2X.
- A two-phase empowerment transaction to ensure historically disadvantaged persons (HDPs) and certain employees collectively hold 13.5% shareholding in the company.
- A prohibition on retrenching any South African employees for two years post-acquisition.
- Ongoing fulfillment of other competition approvals in different jurisdictions.
The acquisition journey was not smooth, with initial rejections due to governance concerns. However, the PIC agreed to back the transaction in April, on condition that a broad-based Black Economic Empowerment (BEE) scheme be incorporated. The Competition Commission recommended approval subject to empowerment conditions in June. The final approval was given by the Competition Tribunal on August 18, 2025.
The focus now shifts to the implementation of the acquisition, including finalizing the empowerment structure and ensuring a smooth transition for employees, clients, and regulators. The acquisition is anticipated to strengthen Zahid Group’s position as a regional powerhouse in heavy machinery and industrial solutions.
Regarding impact on South Africa’s industrial sector, the deal is viewed positively as a win for South Africa, supporting local economic transformation and preserving shareholder value along with broad-based economic benefits through the structured empowerment framework. The acquisition is one of the most significant cross-border deals in South Africa’s industrial sector and is expected to reinforce Caterpillar’s distribution network in Southern Africa.
In summary, the acquisition by Zahid Group is a significant investment in South Africa’s industrial landscape, subject to competition and public interest conditions aimed at ensuring employee security and economic empowerment. This highlights both regulatory oversight and confidence in the industrial sector’s future under new leadership.
[1] BusinessLive. (2025, August 19). Zahid Group's acquisition of Barloworld gets the green light. Retrieved from https://www.businesslive.co.za/bd/companies/2025-08-19-zahid-groups-acquisition-of-barloworld-gets-the-green-light/
[2] Fin24. (2025, August 19). Competition Tribunal approves Zahid Group's acquisition of Barloworld. Retrieved from https://www.fin24.com/Economy/competition-tribunal-approves-zahid-groups-acquisition-of-barloworld-20250819
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