Barloworld investigation finds zero US sanctions violations

Barloworld said Tuesday that an investigation had not uncovered any US sanctions violations in its operations, but there were “apparent violations of US export controls, which the company takes seriously and is addressing.”

The international heavy equipment and vehicles group stated that the US Department of Commerce, Bureau of Industry and Security (BIS), had granted it a further extension, from June 2, 2025, to September 2, 2025, to complete its investigation into apparent US export control violations. The company had submitted an initial notification of Voluntary Self-Disclosure (VSD) to the BIS on September 13, 2024.

Unlike many other South African multi-nationals that sold their operations in Russia due to Western sanctions on that country, Barloworld still retains a subsidiary there, specifically Vostochnaya Technica (VT), which distributes Caterpillar equipment and related services in Siberia.

The BIS wants the international heavy equipment distributor Barloworld to submit a final narrative VSD of apparent US export control violations.

Barloworld said Tuesday that its investigation has been concluded and the final narrative report was submitted to the BIS on September 1, 2025.

“The investigation has not identified any US sanctions violations by the company,” it stated.

Meanwhile, in an update on the standby offer for Barloworld, initially set at R120 a share, made by Saudi Arabia’s Zahid Group and Entsha, a company linked to Barloworld CEO Dominic Sewela, Barloworld’s board said Tuesday that the offer was still open to acceptance by Barloworld’s shareholders.

Barloworld’s share price was trading 0.25% lower on Tuesday at R117.70 per share. On June 24, 2025, Barloworld paid an interim dividend of R1.20 per share, resulting in a net amount of R118.80 per share being payable in line with the terms of the standby offer.

The group stated in a statement that the Dentons Report (Dentons is a global law firm) had concluded that the facts identified in the investigation did not provide a basis for Dentons to believe that there had been any violation of US sanctions by VT, Barloworld Mongolia, Barloworld Middle East, VT UK, and/or Barloworld.

“In Dentons' view, the information disclosed pursuant to the investigation does not provide a basis for any self-disclosures in relation to US sanctions violations to OFAC (Office of Foreign Assets Control).”

This means that one of the standby offer conditions, relating to the final VSD and Dentons Report, had been fulfilled, which was another positive milestone for the transaction.

In another positive step, on August 26, 2025, the Botswana Competition and Consumer Authority unconditionally approved the implementation of the takeover offer.

The only remaining conditions for the proposed transaction are the competition approvals by COMESA (Common Market for Eastern and Southern Africa) as well as those in Angola and Namibia.

The filings in these jurisdictions have been submitted to the relevant authorities, and the parties are working towards obtaining these approvals as soon as possible. Upon receipt of these approvals, and if no material adverse changes occur as at the date on which the outstanding regulatory conditions are fulfilled or waived, then the standby offer would become unconditional.

If these approvals are not received by September 11, 2025, the longstop date would automatically extend by three months.

The deadline for acceptance of the standby offer is 12pm on the first Friday, ten business days or more after the date on which the last of the remaining conditions precedent to the standby offer is fulfilled.

BUSINESS REPORT