SA’s food industry is cooking up its biggest consolidation in more than a decade.
This after Premier announced plans to acquire RFG in a share-swap deal that will create a food powerhouse with nearly R30bn in annual sales, bringing it within touching distance of Tiger Brands, the country’s long-time market leader with revenue of R37.7bn.
Under the transaction, subject to regulatory approvals, Premier will issue 37.2-million shares at R154 each in a one to seven exchange that values RFG at nearly R5.8bn. It gives RFG shareholders a 22.5% stake in the enlarged Premier Group and lets Premier buy scale without a cash outlay.
The offer values RFG at a 35%-37% premium and will lead to its delisting from the JSE once complete.
If approved, the merger will reshape the fast-moving consumer goods (FMCG) sector, creating a formidable competitor to Tiger Brands in everything from staples and baked goods to ready meals, baby food and canned products.
The combined entity would boast R28bn-R30bn in annual revenue and R1.7bn in profit after tax, said Premier CEO Kobus Gertenbach.
Premier, best known for its Blue Ribbon bread, Iwisa maize and Snowflake flour, generated R19.9bn in sales in its past financial year. RFG, the maker of Rhodes, Bull Brand, Magpie and Hinds, brought in R8bn over the same period locally and in 13 other African countries.
Opportune Investments CIO Chris Logan described the merger as “transformative”.
“Importantly, the RFG portfolio, focused on key fresh and long-life categories, complements Premiers’ existing portfolio with little overlap. While it is a big deal for Premier, the envisaged combined annual revenue of Premier and Rhodes of R28bn will still be some way behind Tiger Brands’ R38bn,” he said.
He said the transaction could trigger further consolidation in the food sector as smaller players seek scale.
Aeon Investment Management research analyst Chante Cain said the acquisition would provide Premier with access to value-added categories such as ready meals, canned foods and baby food, expanding its product portfolio.
“Rhodes has established relationships with retailers, including Woolworths. This is expected to enhance Premier’s market presence, as well as its private label capabilities,” Cain said.
According to MP9 CIO Aheesh Singh, the deal “changes Premier’s shape”, adding that the company would transform from being a bread and maize business to a full-on food producer with reach across most grocery categories.
“Considering the synergies between the businesses, a 35%–37% premium is fair for a quality asset with stable earnings and low debt. Premier is paying in shares, so it’s not taking on new debt or stretching its balance sheet,” he said. The risk, however, was “operational … aligning systems, supply chains and company cultures will take work. Success depends on steady execution.”
Near certainty
Investors on Thursday bought the story of scale, synergies and growth potential, sending RFG shares soaring 37%, their biggest single-day jump in years and valuing it at R5.8bn. That valuation is exactly at the offer level, signalling that investors view the deal as likely to succeed and that the remaining deal risk is small.
Major shareholders controlling 77.7% of RFG’s shares have already pledged to vote in favour of the deal, making approval a near certainty.
The transaction still needs Competition Commission approval, though Premier said it was confident it would go through given their minimal product overlap and complementary categories.
“We see no competitive concerns from the merger. In addition, the merger will enable the enlarged Premier to compete on a more equal footing with the large JSE-listed FMCG manufacturers (Tiger Brands, AVI and RCL) , as well as the multinationals that are active in SA, such as PepsiCo.
“As regards any public interest concerns, as there is no overlap in operations between the two groups, we do not foresee any merger-related job losses,” Gertenbach told Business Day.
Premier’s free float and liquidity will also improve as RFG shareholders join its register, a move analysts believe could boost investor appetite and visibility on the JSE.
According to RFG CEO Pieter Hanekom the deal presents a strategic opportunity to build a more competitive and diversified food producer. Being part of Premier offers RFG the advantage of greater scale while preserving its core strengths and market leadership in key categories, he said.
The deal also strengthens the hand of Stellenbosch billionaire Christo Wiese, who controls Premier through his investment vehicle Titan Premier Investments and holds a major stake in Virgin Active owner Brait, Premier’s former parent company.
Wiese, who owns about 46% of Premier, is one of SA’s most influential retail investors, with long-standing holdings in Shoprite and Pepkor. The merger deepens his exposure to the fast-growing food and retail sector, adding to a comeback that began after the Steinhoff scandal dented his empire in 2017. With Jacqueline McKenzie
Update: October 16 2025
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