Barloworld in R23 Billion Takeover by Saudi Giant

Barloworld, the long-standing distributor of Caterpillar equipment in Africa, is set for a major ownership shift after a R23.3 billion takeover bid by a consortium anchored by Saudi Arabia’s Zahid Group and local partners. The deal will result in Barloworld’s delisting from the Johannesburg Stock Exchange (JSE), ending its 80-year run on the bourse.

The group — comprising Gulf Falcon Holding Ltd., a wholly owned subsidiary of Zahid, and Entsha Proprietary Ltd., linked to Barloworld Chief Executive Officer Dominic Sewela — has offered R120 per share for all issued shares. The offer values Barloworld at R23.3 billion, or about $1.3 billion. Zahid Group, which already owns 18.9 percent of Barloworld through Zahid Tractor, has steadily increased its stake over the past four years.

The acquisition will be executed through a newly formed entity, Newco, which is 51 percent owned by Entsha and 49 percent by Zahid Group through Gulf Falcon. Once finalised , Newco will take over Barloworld and oversee its transition into a private company.

Entsha is wholly owned by DKMS Group. (Manco), a newly incorporated South African firm. Manco, in turn, is wholly owned by The Katlego Le Masego Trust, an inter vivos trust established for the benefit of Sewela and his family. The structure is designed to keep Barloworld anchored in South Africa while drawing on Zahid’s expertise and international reach. According to the parties, Entsha’s 51 percent controlling stake will allow Newco to “continue to drive Barloworld’s future growth and support management’s strategic objectives.”

Founded in the 1940s by Sheikh Yousuf Mahmoud Zahid, the Zahid Group is a prominent Saudi family-owned conglomerate with interests spanning energy, transport, construction, and industrial services. It has been a primary Caterpillar dealer in Saudi Arabia since 1950 and boasts a 75-year track record in distributing and servicing Caterpillar equipment. Zahid says its experience in the Caterpillar ecosystem will support Barloworld’s management team, which will continue to run the business after the takeover.

Barloworld is the largest Caterpillar dealer in Africa and among the largest globally. It also hosts the world’s second-largest Caterpillar remanufacturing plant. Its operations extend beyond equipment distribution to include aftermarket services, solutions, and industrial processing. Through its Consumer Industries division, Barloworld also operates Barloworld Ingrain, a starch and glucose business with a footprint in South Africa and Australia. While Ingrain has only minimal sales in Botswana, it provides revenue beyond the group’s core equipment services.

The company has struggled in recent months. First-half fiscal 2025 revenue fell 5.8 percent to R18.1 billion ($1.03 billion), with its Vehicle and Transport division dropping 37 percent and its Southern Africa Equipment segment down 6 percent.

In Botswana, the merger is under review by the Competition and Consumer Authority (CCA), which has received a formal notification of the deal. As part of its process, the Authority has invited stakeholder submissions for or against the transaction. Locally, Barloworld operates Barloworld Equipment Botswana, which distributes and services Caterpillar machinery and spare parts. It also holds a 50 percent share in NMI Durban South Motors Botswana, a joint venture in vehicle sales and rentals.

South Africa’s Competition Tribunal has already granted conditional approval for the takeover, following recommendations from the Competition Commission and hearings with key stakeholders. These included Barloworld, the acquiring consortium, trade unions such as the National Union of Metalworkers of South Africa (NUMSA) and the Food and Allied Workers Union (FAWU), and civil society groups. The Tribunal’s approval is subject to several public interest conditions, particularly on job security and empowerment ownership.

One of the main conditions is that no South African employee will lose their job for at least two years after the merger. During that period, all existing employment terms and conditions must remain unchanged. Ownership structures are also being reshaped: under the agreement, Historically Disadvantaged Persons (HDPs) and participating employees will hold a combined 13.5 percent stake in Barloworld.