Industrial company Barloworld is one step closer to partially exiting the vehicle retail market after reaching an agreement on a joint venture with Akoo family owned NMI Durban South Motors (NMI-DSM).
The deal, valued at almost R1 billion, will see the Sandton head quartered company retaining a 50% stake in the joint venture.
Barloworld’s automotive business includes car rental, retail, fleet services as well as used vehicles and disposals. It is also a dealer for US company Caterpillar (Cat), through its equipment business and has a logistics business, as well as a consumer goods portfolio made up of its starch and glucose unit, that it acquired from Tongaat last year. The venture forms part of the group’s strategy to exit the vehicle sales market and eventually focus on its equipment and food businesses.
Barloworld CEO Dominic Sewela said in a statement: “The proposed restructure into this structure will enable us to achieve efficient capital allocation while providing for a focused Motor Retail business platform in the South African market.”
The R947 million deal, which is set to conclude in June this year, will not include Barloworld’s MyWheels business which sales pre-owned and demo vehicles and its vehicle auction platform, TradersOnline.
The Akoo family has been a Mercedes Benz dealer since 1991 and its relationship with Barloworld for the past 18 years after they built South Africa’s first Brand Campus concept in Umhlanga Ridge.
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