Subject to jobs and empowerment conditions.
A management-led consortium and a Saudi Arabian investor group have secured the Competition Tribunal’s approval to acquire Barloworld, subject to public interest conditions on employment and historically disadvantaged person (HDP) ownership.
In December 2024, Barloworld announced its intention to sell all of its ordinary shares to a newly‑formed holding company, Newco, comprising construction company Entsha, linked to Barloworld CEO Dominic Sewela, and Gulf Falcon Holding, a subsidiary of Saudi Arabia’s Zahid Group, valued at R23.3 billion.
The decision follows hearings held on 17 June, 2 July and 13 August 2025, during which the Competition Commission, the merger parties, the National Union of Metalworkers of South Africa (Numsa) and the Food and Allied Workers Union (Fawu) made submissions.
The tribunal also sought clarification on certain matters and considered revised conditions proposed after oral submissions by the unions.
The acquisition is subject to certain conditions – employment security and employee shareholding.
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Job security conditions
Under the ruling, the merged entity may not retrench any South African employees for two years after implementation.
As a direct result of the transaction, Barloworld staff’s existing terms and conditions of employment must also remain unchanged.
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HDP and employee ownership
The tribunal’s conditions require a two-phase empowerment transaction that will ultimately give HDPs and participating employees a collective 13.5% shareholding in Barloworld.
In Phase 1, to be implemented within one day of the merger’s conclusion, the Barloworld Empowerment Foundation will retain its 3.5% shareholding.
Phase 2 will see the acquisition of a further 10% stake in the company – split equally between an employee share ownership programme (ESOP) and a women-led HDP consortium, to be selected and approved by the merged entity.
Participating employees will be permanent staff employed for at least six months, most of whom are HDPs, not serving notice, facing dismissal proceedings, or employed temporarily.
Phase 2 must be implemented within 24 months of Barloworld’s delisting from the JSE and A2X exchanges, provided the acquiring firm’s “squeeze-out” rights under Section 124 of the Companies Act are exercisable.
The merged entity must also notify the Competition Commission at least 100 days before the 24-month deadline, providing details of the proposed shareholders in Phase 2, including proof of HDP classification.
The commission will have 45 days to review and either approve or request changes.
This article was republished from Moneyweb. Read the original here.