South Africa's Barloworld in Acquisition Talks with Zahid Group Unit

AFRICAN BUSINESS AND ECONOMYNovember 18, 2024 at 2:13 PM UTC

TLDR

Barloworld, distributor of Caterpillar equipment in Africa, in talks with investors including Gulf Falcon & Entsha to make an offer for all issued shares, valued at 16 billion rand.
Zahid Group, already owning 18.9% through Zahid Tractor, has been acquiring Barloworld shares for four years.
Potential deal could lead to Barloworld becoming private; significant implications for Caterpillar operations in African countries like South Africa, Zambia, Angola, and the DRC.

Barloworld, a Johannesburg-based distributor of Caterpillar Inc. equipment in Africa, is negotiating with a consortium of investors, including Gulf Falcon Holding Ltd., a subsidiary of Saudi Arabia’s Zahid Group, and Entsha.

The consortium plans to make an offer for all issued ordinary shares of Barloworld, which is valued at around 16 billion rand ($876 million). If successful, the deal could result in Barloworld being taken private.

Zahid Group, a distributor of heavy machinery, began acquiring Barloworld shares four years ago and currently holds an 18.9% stake through its unit Zahid Tractor and Heavy Machinery Co. Barloworld operates as Caterpillar’s dealer in multiple African countries, including South Africa, Zambia, Angola, and the Democratic Republic of Congo.

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Key Takeaways

This potential acquisition highlights growing Middle Eastern interest in African markets, as regional players like Zahid Group seek influence alongside global competitors. Saudi Arabia’s ACWA Power has pledged $10 billion for South Africa’s renewable energy sector, and DP World manages nine African ports. For Barloworld, a buyout could mean a strategic shift amid its African and Russian operations, the latter under internal review for export compliance.

Business

Finance

Barloworld

Caterpillar Inc.

South Africa

Acquisition