Chinese, Canadian, Swiss and other international giants snapping up South African companies

Several international companies are purchasing South African-based businesses, with the outlook on the economy improving substantially from a year ago.

2024 saw several international companies close or cut back on their operations in South Africa.

As per a global strategy, French-based BNP Paribas stopped operating as a bank in South Africa in early 2024.

UK-based bank HSBC also announced the sale of parts of its South African business to FirstRand and Absa.

Shell announced that it would sell its downstream business in South Africa, which includes its network of petrol stations.

Anglo American also announced its plans to unbundle Anglo American Platinum amidst a challenging period for the Platinum Group Metals (PGM) sector.

Streamer Britbox also stopped operating in South Africa, while Rolex closed its official affiliate in South Africa.

These announcements came amidst a mixed period for South Africa, with the economy expected to now grow by under 1% in 2024.

However, amidst the drop in load shedding and the formation of the Government of National Unity (GNU), investor sentiment improved dramatically in South Africa.

South African equities, bond yields and the rand all saw a strong performance in the second half of the year.

Although there has been heightened volatility since the return of US President Donald Trump, South African assets have been relatively stable compared to their emerging market counterparts.

Thus, despite the announcements of several closures in 2024, there have also recently been several international companies expanding their presence in South Africa through acquisitions.

This includes:

• Chinese-based Haier Smart Home acquiring Kwikot
• Canadian-based Syntax Systems acquiring Argon Supply Chain Solutions.
• Switzerland-based HIFI FILTER acquiring FILVENT Holdings
• Nigerian-based Access Bank proposed takeover of Bidvest Bank
• Saudi-based Zahid Group proposed takeover of Barloworld

China

It was recently announced that Haier Smart Home, the world’s largest home appliance brand, would be buying South African water heating provider Kwikot.

Kwikot was founded in 1902 and sells electric water heaters, solar water heaters, gas water heaters, heat pumps and more.

Chinese-based Haier Smart Home is a Fortune 500 company whose brands include Haier, Casarte, Aqua and Candy.

The purchase forms part of a larger deal announced by Haier Smart Home, where it would acquire 100% equity in the Swedish-based Electrolux Group’s South African subsidiary.

Electrolux South Africa Proprietary Limited, which had an enterprise value of about R2.5 billion, owns Kwikot.

Jiangyong Guan, Vice President of Haier Smart Home, said that the group plans to assist Kwikot with its continued growth.

Canada

Canadian-based Syntax Systems recently took over SAP service provider Argon Supply Chain Solutions.

Argon, which operates in South Africa and the UK, was founded in 2011 and provides Warehouse and Stock Management services.

Its customers include Pick n Pay, Dis-Chem, Cipla, Makro, Builder’s Warehouse, Aspen, and Volkswagen.

Montreal-based Syntax has over 50 years of experience and over 900 customers across the globe.

It is a global technology services provider for cloud application implementation and management. Its partners include SAP, Oracle, AWS, Microsoft and other technology powerhouses.

Switzerland

Swiss-owned HIFI FILTER recently acquired FILVENT Holdings, one the biggest companies in the South African filtration market.

The Swiss family-owned group was founded nearly 50 years ago in 1977 and is the largest filter distributor in Europe.

It said that the acquisition illustrates its desire to expand its international presence, with the acquisition of FILVENT Holdings its first foray into Africa.

The group will also open its first sales outlet outside of Europe.

FILVENT was founded in 1991 and is based in eMalahleni (Witbank, Mpumalanga). It has 70 employees, a sales office in Johannesburg and an extensive distribution network.

“FILVENT is renowned for its 40 years of experience and expertise in industrial dust collection and the manufacture of air filter housings for internal combustion engines,” said HIFI FILTER.

Nigeria

When it comes to proposed purchases, a major move is the proposed takeover of Bidvest Bank by Nigerian-based Access Bank.

Bidvest is selling its banking division to Access Bank, which is expected to raise R2.8 billion. These funds are set to be used by Bidvest to settle existing debt.

The purchase still has to undergo regulatory approval in South Africa and Nigeria, but is expected to be completed in the second half of 2025.

Access Bank is the biggest lender in Nigeria when it comes to assets. It is a full-service bank with over 60 million customers across three continents.

Should the acquisition progress, Bidvest Bank is set to be merged with Access Bank’s existing South African subsidiary to establish a larger platform to anchor its growth strategy in the SADC region.

Notably, Moody’s said that the acquisition could lead to a multi-notch downgrade of Bidvest Bank’s issuer rating due to the loss of parental support from the Bidvest Group.

Saudi Arabia

A unit of Saudi Arabia’s Zahid Group led to the offer to purchase all the shares in Barloworld.

The group purchasing Barloworld includes Zahid-owned Gulf Falcon Holding and Entsha, which is linked to Barloworld CEO Dominic Sewela.

The Zahid Group, which is a long-term shareholder of Barloworld, said that it believes in the business’s fundamental strengths.

Barloworld is the African distributor of Caterpillar and will be delisted from the Johannesburg Stock Exchange if the deal goes through.

Barlowolrd is the official Caterpillar dealer in several African nations, such as Zambia, Malawi, Angola, the Democratic Republic of Congo and South Africa.