Barloworld in talks to sell African Caterpillar business to Zahid Group-led consortium

Timilehin Adejumobi -
Key Points
  • Barloworld, valued at $878 million, is in talks to sell its African Caterpillar distribution business to Zahid Group’s consortium.
  • Saudi Arabia’s Zahid Group, increasing African investments, seeks deeper influence in Africa's infrastructure sector.
  • Barloworld faces financial struggles, with a revenue decline, while CEO Dominic Sewela remains committed to its recovery.

Barloworld Group, a leading industrial conglomerate led by South African business executive Dominic Sewela, is in talks to sell its African Caterpillar distribution business to a consortium led by Saudi Arabia’s Zahid Group.

The bid, led by Zahid Group’s Gulf Falcon Holding and South Africa’s Entsha Ltd., would involve acquiring Barloworld’s shares through a special-purpose vehicle, potentially paving the way for the company’s privatization. Barloworld is valued at around R16 billion ($878 million).

Saudi Arabia eyes greater influence in Africa

Zahid Group, which already holds an 18.9 percent stake in Barloworld through Zahid Tractor and Heavy Machinery Co., has been ramping up its investments in Africa.

The move aligns with Saudi Arabia’s broader strategy to expand its presence on the continent amid competition from China and Europe. Zahid’s entry into the full acquisition talks signals its intent to deepen its influence in Africa’s growing infrastructure market.

This transaction comes as other Saudi companies also ramp up their investment strategies in Africa. ACWA Power plans to invest $10 billion in South Africa’s renewable energy sector, while DP World has made its mark operating nine ports across the continent.

Barloworld’s financial struggles amid growing Saudi influence

Barloworld, headquartered in Sandton, South Africa, faced an 8 percent decline in revenue for the first half of 2024, down to R19.2 billion ($1.06 billion). The company is currently undergoing efforts to streamline its operations and revitalize its portfolio.

CEO Dominic Sewela, one of South Africa’s wealthiest executives, continues to hold a 0.23 percent stake in Barloworld, valued at over $2 million. His commitment to the company is a reflection of his ongoing belief in its recovery, though the company faces mounting pressure amid declining financial performance.

The potential deal with Zahid Group, if finalized, would mark a significant shift in Barloworld’s future and could see the company exit from the public market. It also underscores the growing influence of Gulf investors as key players in Africa’s infrastructure development.