Sale of iconic South African company gets the green light

The Competition Commission has recommended that the Competition Tribunal approve the proposed transaction whereby NewCo intends to acquire Barloworld.

Barloworld is a South African holding company with interests in industrial equipment, industrial services, and agriculture.

The company dates back to 1902, when Major Ernest Barlow borrowed £1,000 to form Thomas Barlow & Sons in Durban, South Africa.

Based on the family business in England with the same name, the company sold woollen goods, blankets and coats. It expanded to include engineering supplies within five years.

In 1920, the company expanded to Johannesburg, just before Ernest Barlow died from wounds he suffered in World War 1. His wife, Anne Barlow, took over as its governing director in 1921.

The fortunes of the Barlow family changed in 1927 when the Caterpillar founder visited South Africa to find agents in the country. Barlow & Sons were appointed dealers for Natal.

At this time, Ernest’s son Charles Sydney Barlow, called ‘Punch’, began distinguishing himself as an adept salesman.

In 1940, after relocating its headquarters to Johannesburg, it listed on the Johannesburg Stock Exchange (JSE).

Barlow also entered the motor business, and eventually expanded into the manufacture of cement, paint, stainless steel and household appliances, as well as mining.

Punch Barlow led the company’s transition into a sprawling conglomerate that straddled the South African economy in a similar vein to Anglo American.

It acquired Rand Mines Limited in 1971, with the new company called Barlow Rand. In 1988, it entered the Russian market through its subsidiary Vostochnaya Technica.

By 1994, the company was generating profits of over R1 billion a year, employed 240,000 people and was ranked 79th on the Fortune 500 list of global companies.

Following the end of apartheid, the company rapidly expanded its overseas interests and changed its name to Barloworld in 2000 to emphasise its global reach.

It has expanded rapidly its operations and geographical presence over the last three decades and currently operates in 16 countries.

Today, Barloworld is an industrial processing, distribution, and services company with two primary areas of focus: Industrial Equipment and Services and Consumer Industries.

In 2022, Barloworld celebrated 120 years of existence, and Barloworld Equipment celebrated 95 years of partnership with Caterpillar.

Barloworld deal

In 2024, Barloworld announced that a consortium of investors comprising Entsha (51%) and long-term shareholder Zahid Group (49%) planned to acquire the company.

This would result in Barloworld’s delisting from the Johannesburg Stock Exchange (JSE) and its transformation into a privately held company.

Earlier this year, an independent board recommended to shareholders that they vote in favour of the takeover bid from Entsha and Zahid Group.

It added that equipment supplier Caterpillar, of which Barloworld is the sole distributor in Southern Africa, is in support of the deal.

Despite the involvement of the group’s CEO in the consortium, Barloworld said it believes it has put sufficient conflict-of-interest safeguards in place.

This included the formation of an independent board to evaluate the consortium’s offer for the company.

It also included the establishment of a steering committee consisting of select unconflicted executives.

The consortium offered R123.10 per Barlowrold share, representing a premium of 87% to the company’s 30-day average share price. This values the company at a total of R23 billion.

Following the implementation of the proposed transaction, Barloworld will retain its name and remain headquartered in South Africa.

An independent expert, Rothschild & Co., was appointed by the board to opine on the fairness and reasonableness of the offer.

It has concluded that the offer is fair and reasonable. The Independent Expert has provided its valuation range, which is R105.53 to R119.43 per share.

As a result, the board recommended in the circular that shareholders vote in favour of the scheme based on the independent expert’s opinion.

Chair of the board, Dr Lulu Gwagwa, said the circular represents a significant milestone in the transaction process. It marks substantial progress towards the completion of the takeover.

Competition Commission approves the deal

On 5 June 2025, the Competition Commission announced that it recommended that the Competition Tribunal approve the proposed transaction.

It said NewCo is a special-purpose vehicle incorporated for the proposed merger, which is jointly controlled by Entsha and Falcon Holding.

NewCo does not control any firms in South Africa and has been created to enable its shareholders, who are existing shareholders of Barloworld, to acquire control over Barloworld.

It added that the acquiring group does not conduct any activities in South Africa and that Barloworld is not controlled by any firm.

“The Commission is of the view that the proposed transaction is unlikely to substantially lessen or prevent competition in any market,” it said.

To address public interest concerns, the merger parties have agreed to a phased transaction to increase ownership by historically disadvantaged persons (HDPs) and employees.