Saudi Zahid Group, together with partners Gulf Falcon Holding Ltd. and Entsha Ltd., has submitted an offer to acquire Barloworld Ltd., the South African distributor of Caterpillar Inc. equipment. This is reported in the Zahid press release.
The transaction value is 22.8 billion rand ($1.3 billion) at a price of 120 rand per share (30% higher than the closing price on December 10).
Zahid Group is betting on the sharp growth of the construction sector in Africa, which is projected to grow by 27% by 2029 due to government investments in infrastructure in the amount of 4.8 trillion RAND and the strengthening of the consumer market.
Some Barloworld shareholders, including Silchester International Investors (18%), rejected the offer, considering it too low.
Zahid Group, which began buying up Barloworld shares four years ago and increased its stake to 19%, initially approached the Barloworld board of directors in February 2024.
Middle Eastern companies are looking to invest in Africa in competition with China and France. In particular, Saudi ACWA Power signed a memorandum on investing $10 billion in the renewable energy sector of South Africa over ten years, and Dubai-based logistics company DP World manages the assets of nine African ports.
Barloworld is a South African industrial processing, distribution and services company in the field of industrial equipment and consumer goods. The company offers earthmoving equipment, industrial services and energy systems for the mining, construction and energy industries. Barloworld is an authorized Caterpillar dealer in several African countries, including Zambia, Congo, Malawi, Angola and South Africa. The headquarters is located in Sandton (South Africa).
Zahid Group is a Saudi group of companies and strategic partnerships in the markets of mining, oil and gas, energy, construction materials, transport, etc. The headquarters is located in Jeddah (Saudi Arabia).
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