Premier Group to acquire RFG Holdings in US$1.62B share-swap deal
The acquisition will create one of South Africa’s largest food producers with combined annual revenue projected at R28 billion.
SOUTH AFRICA – Premier Group has announced plans to acquire fellow South African food producer RFG Holdings in a share-swap transaction that will see RFG shareholders collectively hold about 22.5% of the enlarged Premier Group.
Under the terms of the agreement, RFG shareholders will receive one Premier share for every seven RFG shares held. The offer represents a 35.6% premium over the closing prices and a 37.5% premium above the 30-day volume-weighted average prices for Premier and RFG shares as of 14 October.
The exchange ratio is based on a reference price of R22 (US$1.27) per RFG share and R154 (US$8.89) per Premier share.
Upon completion of the deal, RFG Holdings will delist from the Johannesburg Stock Exchange (JSE). According to the companies’ joint statement, RFG’s senior management team will remain in place, continuing to oversee operations under Premier’s ownership.
Founded in 1896 in Groot Drakenstein, Western Cape, RFG operates 14 manufacturing facilities across South Africa and Eswatini. The company is known for producing convenience foods for domestic and international markets.
Its brands include Rhodes canned vegetables and fruit juices, Pakco curry powders, and Man’s Meal ready-to-eat pies.
RFG also manufactures private label products for major South African and international retailers, with exports reaching markets in the UK, Europe, the US, and 13 sub-Saharan African countries.
Premier Group, established in 1824 and headquartered in Midrand, operates two core divisions; Millbake, which handles bread, maize, and wheat products, and Groceries and International, which produces sugar sweets, household goods, and beverages through facilities in Mozambique.
The company owns 38 brands, including Blue Ribbon, BB Bread, Snowflake, Mandla Mahewu, and Nyala Amahewu.
Premier CEO Kobus Gertenbach said the acquisition will create a combined business generating around R28 billion in annual revenue and R1.7 billion (US$98.1M) in after-tax profit. He added that the transaction will increase Premier’s free float on the JSE, enhancing liquidity.
Gertenbach described RFG as “a highly attractive acquisition opportunity” with strong brand equity, market leadership in convenience meals, and “limited integration risk.” He noted that while the two companies share many customers, there is no overlap in their product categories, which will help “unlock value and deliver significant synergies.”
Since its JSE listing in March 2023, Premier’s market capitalization has increased from R6.7 billion (US$386.8M) to R19.8 billion (US$1.1B). RFG, listed since October 2014, has completed ten acquisitions to diversify its product range and expand into new markets.
RFG CEO Pieter Hanekom said the deal provides a “compelling strategic rationale” for creating a stronger, more competitive food producer in South Africa.
The acquisition remains subject to regulatory approvals and shareholder votes. Holders of 77.7% of RFG shares have pledged their support, along with Premier’s largest investors, Brait and Titan, and major institutional shareholders.
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