The Competition Tribunal has approved the sale of Barloworld to a group of the company’s senior managers and a Saudi Arabian investor group. The approval came with strict conditions aimed at protecting jobs and increasing ownership by historically disadvantaged persons (HDPs).

The tribunal considered the case during three hearings, held on June 17, July 2 and August 13.

Submissions were made by the Competition Commission, the buyers, Barloworld, the National Union of Metalworkers of South Africa and the Food and Allied Workers Union. The hearings covered questions from the tribunal, as well as changes to the proposed conditions after the unions gave their views.

One of the main conditions is that no South African employee may lose their job because of the merger for at least two years after it takes effect. The merged company must also keep all existing terms and conditions of employment unchanged during this time.

The agreement also requires Barloworld to give HDPs and participating employees a combined 13.5% ownership in the company. This will happen in two stages.

In the first stage, to be completed within one day of the deal’s finalisation, the Barloworld Empowerment Foundation will keep its existing 3.5% shareholding in the company.

The second stage will happen within 24 months of Barloworld being delisted from the JSE and A2X stock exchanges. This will involve HDPs and employees receiving another 10% of the company’s shares, split equally between a women-led HDP investment group and an employee share ownership scheme.

The employee scheme will be open to permanent Barloworld staff who have worked for the company for at least six months, with most of them being HDPs. Temporary staff, fixed-term workers and anyone facing dismissal or already in the process of leaving will not qualify.

The second stage will only go ahead if Barloworld is delisted and the new owners are able to use a legal option under the Companies Act to buy out any remaining shareholders.

Before this happens, the company must give the commission full details of the transaction at least 100 days before the 24-month deadline. This must include proof that the chosen women-led consortium qualifies as an HDP group. The commission will then have 45 days to approve or raise concerns.