The Namibian Competition Commission has granted unconditional approval for the standby offer by Barloworld and its management-led acquisition vehicle to acquire the company’s shares.
The approval cleared another regulatory requirement for the transaction, the company said in a statement on Thursday.
The Namibian approval follows Barloworld’s completion of an internal investigation and the submission of a final report on the review of export control compliance issues, specifically involving its sales to its Russian subsidiary.
On September 2, Barloworld completed its internal investigation and said it had not identified any US sanction violations in its dealings with Russia. It did, however, identify apparent violations of US export controls, which the company “takes seriously and is addressing”.
Barloworld had a deadline of September 2 to complete its investigation and submit a final narrative account of voluntary self-disclosure of apparent US export control violations to the US department of commerce’s bureau of industry and security.
The investigation, launched in September 2024, focused on potential export control breaches by Barloworld’s Russian subsidiary, Vostochnaya Technica (VT), and was conducted by an independent forensic firm under the guidance of US legal counsel.
VT, Barloworld’s Russian equipment distribution business headquartered in Novosibirsk, has been affected by international sanctions and the Russia-Ukraine conflict, resulting in a fall in revenue and a shrinking market. The business supplies construction, mining, power equipment and technical support countrywide through 17 divisions, seven service centres and 17 parts warehouses.
The company has already secured clearance from the Botswana Competition and Consumer Authority, meaning most regulatory conditions for the management-led offer have now been met.
Competition approvals are still pending from the Common Market for Eastern and Southern Africa (Comesa) and Angola, where filings have already been lodged. According to the statement, both parties continue to engage with authorities to obtain the outstanding clearances.
The offer, made by Barloworld CEO Dominic Sewela through Entsha, a 100% black-owned SA company, and Gulf Falcon Holding, part of Saudi Arabia’s Zahid Group, was announced in December 2024. The deal values Barloworld at about R23bn and offers shareholders R120 per share in cash.
It aims to create a majority black-owned, privately held SA industrial group while retaining Barloworld’s headquarters, brand and operations. The consortium has indicated that no job losses are expected.
With some regulatory approvals still pending, the offer’s longstop date has been automatically extended by three months to December 11.
So far, the management-led buyout has received valid acceptances for about 41.1% of Barloworld’s ordinary shares. Together with holdings by consortium members and the Barloworld Foundation, support amounts to about 64.5% of shares in issue.
The standby offer will stay open until either December 11 or 10 business days after all approvals are secured and the deal is declared unconditional, whichever comes first.
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