{"id":849260,"date":"2026-01-29T14:18:24","date_gmt":"2026-01-29T12:18:24","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=849260"},"modified":"2026-01-29T14:26:31","modified_gmt":"2026-01-29T12:26:31","slug":"200-year-old-south-african-food-giant-gets-the-green-light-to-buy-its-competitor","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/849260\/200-year-old-south-african-food-giant-gets-the-green-light-to-buy-its-competitor\/","title":{"rendered":"200-year-old South African food giant gets the green light to buy its competitor"},"content":{"rendered":"\n<p>The Competition Commission has recommended that food group Premier&#8217;s acquisition of competing producer RFG be approved by the Competition Tribunal.<\/p>\n\n\n\n<p>Premier owns several iconic food brands in South Africa, including Mister Sweet, Iwisa, Super C, Blue Ribbon, Rascals and many more. The company was founded in 1824 as a bakery. <\/p>\n\n\n\n<p>RFG, on the other hand, has Rhodes Quality, Magpie, Bull Brand, Mama\u2019s Pies, and several others with production facilities in South Africa and Eswatini. <\/p>\n\n\n\n<p>In October, Premier announced an offer to acquire all of RFG&#8217;s ordinary shares in exchange for Premier&#8217;s ordinary shares. <\/p>\n\n\n\n<p>It said that the combined group would have a combined annual revenue of roughly R28 billion and profit after tax of approximately R1.8 billion, which Premier argued would increase the scale of its operations. <\/p>\n\n\n\n<p>The senior RFG management team would remain in their positions to continue running RFG operations as part of Premier.&nbsp;<\/p>\n\n\n\n<p>For RFG shareholders, the Scheme Consideration represented a premium per RFG share of:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>35.6% based on the closing prices of a Premier Share and an RFG Share on 14 October 2025 of R153.28 and R16.15, respectively;<\/li>\n\n\n\n<li>37.5% based on the 30-day volume-weighted average price (\u2018VWAP\u2019) of a Premier Share and an RFG Share to 14 October 2025 of R148.45 and R15.42, respectively, and<\/li>\n\n\n\n<li>7.2% based on the VWAP of a Premier Share and an RFG Share since 16 September 2025, of R153.50 and R15.98, respectively, being the date that both companies released trading updates.<\/li>\n<\/ul>\n\n\n\n<p>Premier added that the acquisition of RFG and the issuance of new Premier shares will increase the company\u2019s free float on the JSE, further boosting liquidity in its shares.&nbsp;<\/p>\n\n\n\n<p>The Competition Commission recommended that the Competition Tribunal approve the deal, subject to conditions. <\/p>\n\n\n\n<p>The commission said that the transaction is unlikely to lessen or prevent competition in any market.<\/p>\n\n\n\n<p>To address employment concerns, the parties will also undertake not to retrench any employees as a result of the merger for a period of three years. <\/p>\n\n\n\n<p>Premier is also committed to increasing its combined annual spend on enterprise and supplier development initiatives over the three-year period from the merger implementation date. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Deal looks good<\/h2>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><a  data-lightbox=\"post-image\" href=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2026\/01\/bull-brand.jpeg\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2026\/01\/bull-brand-1024x576.jpeg\" alt=\"\" class=\"wp-image-849273\" srcset=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2026\/01\/bull-brand-1024x576.jpeg 1024w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2026\/01\/bull-brand-300x169.jpeg 300w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2026\/01\/bull-brand-768x432.jpeg 768w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2026\/01\/bull-brand.jpeg 1200w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/a><\/figure><\/div>\n\n\n<p>Sean Culverwell, Investment Analyst at Anchor Capital, said that Premier is headlined by its flagship Blue Ribbon brand, making it the \u201cShoprite\u201d of milling and baking.&nbsp;<\/p>\n\n\n\n<p>\u201cThe company\u2019s 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<p>\u201cPremier\u2019s 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<p>Anchor Capital said that the deal makes strategic and financial sense, given the limited liquidity in Premier shares and the concentration risk associated with Millbake.&nbsp;<\/p>\n\n\n\n<p>A consolidation with RFG addresses limited liquidity and concentration risk while also providing immediate earnings accretion. <\/p>\n\n\n\n<p>\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&nbsp;<\/p>\n\n\n\n<p>\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&nbsp;<\/p>\n\n\n\n<p>Moreover, with the deal being 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<p>\u201cBoth of which would be the cherry on top of what is an already enticing investment case,&#8221; said Culverwell. <\/p>\n","protected":false},"excerpt":{"rendered":"<p>Premier Foods has received the go-ahead from the Competition Commission to acquire RFG, subject to conditions. <\/p>\n","protected":false},"author":95,"featured_media":840103,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[11827,23825,23826],"class_list":["post-849260","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-anchor-capital","tag-premier","tag-rfg"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/849260","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=849260"}],"version-history":[{"count":5,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/849260\/revisions"}],"predecessor-version":[{"id":849300,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/849260\/revisions\/849300"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/840103"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=849260"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=849260"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=849260"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}