One of South Africa’s oldest companies snaps up competitor

Premier has announced its firm intention to acquire food producer RFG, which would result in the merger of two of South Africa’s oldest companies.

Founded in 1824, Premier is one of South Africa’s oldest companies and owns many well-known food brands, including Blue Ribbon, Iwisa, Manhattan, Mister Sweets, Snowflake, and Super C.

The company’s manufacturing footprint spans 30 mills, bakeries and plants, supported by 28 distribution depots in South Africa, Mozambique, Eswatini and Lesotho

RFG Holdings, previously known as Rhodes Food Group, specialises in convenience meal solutions and started as a canned fruit and jams producer in 1896.

Since then, the group has grown into a multinational food producer that packages premium private label product ranges for key retailers and houses well-known brands like Rhodes and Bisto.

On Thursday, 16 October, Premier announced that it has entered into a deal to buy all of RFG’s issued ordinary shares, excluding those held by RFG or its subsidiaries.

This deal will take the form of a share swap, with 1 Premier share exchanged for every 7 RFG shares. This ratio is based on a reference price of R22.00 per RFG share and R154.00 per Premier share.

Premier will also pay a cash amount in respect of any fractional entitlement to its shares.

Following the implementation of this deal, RFG shareholders will receive Premier shares and become shareholders in Premier, holding an aggregate 22.5% stake in the combined group.

RFG will also delist from the JSE, marking the end of an era for the company, which has been listed on the exchange since January 1970.

Premier explained that this deal presents a good opportunity for both companies’ shareholders, with the combined group set to have annual revenue of around R27.9 billion and profit after tax of about R1.7 billion.

It added that RFG’s senior management will remain in their positions to continue running the company’s operations as part of Premier.