Barloworld is in talks with a group of investors that includes a unit of Saudi Arabia’s Zahid Group about the acquisition of the African distributor of Caterpillar Inc. equipment.
The Johannesburg-based company, valued at about R16-billion, said the discussions are with a consortium that includes Gulf Falcon Holding — a wholly owned subsidiary of Zahid — and Entsha.
“Barloworld has entered into negotiations with a consortium of investors, acting through a newly established SPV, which, if concluded, will result in the consortium making an offer to acquire all of the issued ordinary shares in Barloworld,” it said in a statement on Friday.
Middle Eastern firms have increasingly been seeking investments in Africa, jockeying for influence with established players like China and France. ACWA Power, a Riyadh-based company, has signed a memorandum of understanding to invest $10-billion in South Africa’s renewable-energy industry over the next 10 years, while DP World, the Dubai-based logistics company, operates nine ports on the continent.
The announcement confirms an earlier Bloomberg report.
The Saudi group, a distributor of heavy equipment machinery in the Middle Eastern nation, started buying shares of Barloworld four years ago. One of its units, Zahid Tractor and Heavy Machinery Co, owns 18.9% of the South African company.
Barloworld is the official Caterpillar dealer in several African countries including Zambia, the Democratic Republic of Congo, Malawi, Angola and South Africa. It also has a business in Russia that has been subject to an internal investigation into possible export violations.
A deal may see Barloworld being taken private.
Edited by: Bloomberg
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