Table of Contents
Key Points
- Standard Bank is committing R17 billion ($913.2 million) to support the R22.8 billion ($1.23 billion) takeover of South African industrial giant Barloworld.
- The $1.23 billion deal values Barloworld at $6.607 per share, an 87% premium on its 30-day VWAP before the first transaction-related cautionary announcement.
- If approved, the buyout will make Barloworld a majority black-owned private firm, maintaining its South African base and operational continuity with Caterpillar’s backing.
Standard Bank Group, a Johannesburg-based financial services giant led by Sim Tshabalala, is committing up to R17 billion ($913.2 million) to support a major takeover of South African industrial giant Barloworld. The bank’s backing is a key part of the broader R22.8 billion ($1.23 billion) bid, reinforcing its role as a dominant corporate financier on the continent.
A shift toward majority Black ownership
The R23.3 billion ($1.25 billion) offer comes from a consortium led by Saudi Arabia’s Zahid Group and Entsha Ltd., a firm co-owned by Barloworld CEO Dominic Sewela. Their bid represents an 87 percent premium over Barloworld’s 30-day VWAP as of April 12, 2024—a significant mark-up that signals strong confidence in the company’s future.
With backing from Barloworld’s board, the acquiring entity, Newco, has offered R120.00 ($6.44) per share in cash, maintaining the valuation despite Barloworld’s R3.10 ($0.166) dividend declared on Nov. 22, 2024. If successful, the deal will turn Barloworld into a majority black-owned company, advancing South Africa’s Black Economic Empowerment (BEE) goals while preserving its core business.
Governance and regulatory oversight
In terms of governance, Barloworld has taken all necessary steps to ensure the integrity of the process. The company’s Independent Board, advised by Rothschild & Co, has deemed the offer fair and reasonable, ensuring regulatory compliance and avoiding conflicts of interest, particularly with CEO Dominic Sewela’s involvement.
Zahid Group’s 49 percent stake in Newco strengthens the deal with its extensive experience in the industrial sector, particularly in Caterpillar dealerships. Having been a Caterpillar dealer since 1950, Zahid’s industry expertise is expected to support Barloworld’s long-term growth and regional expansion.
Standard Bank’s expanding influence
Under Tshabalala’s leadership, Standard Bank has maintained its dominance as Africa’s top corporate financier, with a market capitalization of $19.5 billion on the Johannesburg Stock Exchange. The bank operates in 19 sub-Saharan African countries, including Uganda, Tanzania, Kenya, South Sudan, and Ethiopia, steadily expanding its reach.
If the takeover goes through, it will mark a turning point for both Barloworld and Standard Bank. For Barloworld, it signals a new chapter as part of a majority black-owned enterprise with the backing of Zahid Group and Caterpillar. For Standard Bank, it further cements its position as a key force in shaping Africa’s corporate landscape, providing the financial muscle behind one of South Africa’s biggest industrial deals.
