{"id":845906,"date":"2026-01-03T10:00:00","date_gmt":"2026-01-03T08:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=845906"},"modified":"2026-01-03T10:08:27","modified_gmt":"2026-01-03T08:08:27","slug":"two-south-african-companies-to-create-r28-billion-food-giant","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business-opinion\/845906\/two-south-african-companies-to-create-r28-billion-food-giant\/","title":{"rendered":"Two South African companies to create R28 billion food giant"},"content":{"rendered":"\n

Premier Group is one of South Africa\u2019s leading food producers, with the company set to benefit from the acquisition of RFG. <\/p>\n\n\n\n

Sean Culverwell, Investment Analyst at Anchor Capital, said that Premier is headlined by its flagship Blue Ribbon brand, which makes it the \u201cShoprite\u201d of milling and baking. <\/p>\n\n\n\n

\u201cThe company’s growth strategy hinges on three core drivers: single-digit revenue growth, operating margin expansion, and declining finance costs,\u201d said Culverwell.<\/p>\n\n\n\n

\u201cPremier’s consistent execution against these levers has delivered industry-leading growth since its listing, a trend we anticipate will continue through the coming year.\u201d<\/p>\n\n\n\n

He added that the acquisition of RFG creates a formidable company, with management feeling confident of closing the deal by the end of March 2026. <\/p>\n\n\n\n

RFG is also a food producer specialising in food, dairy, juices and canned goods; its brands include Rhodes, Bull Brand, and Pakco.<\/p>\n\n\n\n

Premier has offered to acquire all of the ordinary shares of RFG, excluding treasury shares, in exchange for Premier\u2019s own ordinary shares. <\/p>\n\n\n\n

Premier previously said that the transaction creates an opportunity for shareholders of both companies to participate in the future growth of the combined group. <\/p>\n\n\n\n

Premier previosuly said that the combined group will have a combined annual revenue of about R28 billion and profit after tax of about R1.8 billion.\u00a0<\/p>\n\n\n\n

Anchor Capital believes that the deal makes strategic and financial sense, given the limited liquidity in Premier shares and the concentration risk of Millbake. <\/p>\n\n\n\n

\u201cConsolidating RFG addresses both, while also providing immediate earnings accretion,\u201d said Culverwell. <\/p>\n\n\n\n

\u201cThe industrial and route-to-market synergies between the two companies are obvious on paper, but such benefits are often difficult to deliver in practice.\u201d\u00a0<\/p>\n\n\n\n

\u201cHowever, CEO Kobus Gertenbach and his team have given us little reason to question their execution, so we look forward to seeing what Premier can achieve with the consolidated entity.\u201d <\/p>\n\n\n\n

Other improvements at the group <\/h2>\n\n\n
\n
\"\"<\/a><\/figure><\/div>\n\n\n

In addition to the RFG acquisition, the opening of the long-delayed Aeroton mega-bakery in November is also expected to be a major margin driver for the group. <\/p>\n\n\n\n

The company can now consolidate its regional manufacturing footprint by mothballing its three older bakeries across Gauteng and the North West. <\/p>\n\n\n\n

Lowering the requirement to transport bread from other facilities to service the area should lead to cost savings, while the new site also drives improvements in quality and service levels. <\/p>\n\n\n\n

\u201cLowering the requirement to transport bread from other facilities to service the area should result in cost savings, <\/p>\n\n\n\n

The Group already commissioned its Pretoria mega-bakery in 2023, and the benefits have been evident since it opened. <\/p>\n\n\n\n

With the commissioning of Aeroten, Premier has also completed its Millbake capital expenditure cycle. <\/p>\n\n\n\n

With the RFG deal also a share swap, rising cash on the balance sheet should also present an opportunity for management to increase the dividend payout ratio or buy back shares. <\/p>\n\n\n\n

\u201cBoth of which would be the cherry on top of what is an already enticing investment case.\u201d  <\/p>\n\n\n

\n
\"\"<\/a>
\u00a0Millbake EBIT margin (Source: Anchor Capital)<\/figcaption><\/figure><\/div>\n\n\n
\n","protected":false},"excerpt":{"rendered":"

Premier’s acquisition of RFG has received the backing of Anchor Capital’s Sean Culverwell, with Premier set to see an earnings improvement. <\/p>\n","protected":false},"author":95,"featured_media":840106,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[11827,23826],"class_list":["post-845906","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-opinion","tag-anchor-capital","tag-rfg"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/845906","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=845906"}],"version-history":[{"count":8,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/845906\/revisions"}],"predecessor-version":[{"id":846981,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/845906\/revisions\/846981"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/840106"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=845906"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=845906"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=845906"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}