17 Oct 2025 Premier Foods to acquire RFG
Premier Group’s announced share-swap offer for RFG Holdings is one of the most significant consolidation moves in the South African food sector this year.….
The deal — structured as one Premier share for every seven RFG shares (based on reference prices of R154 and R22 respectively) — would give RFG shareholders about 22.5% of the enlarged group, create a combined business with almost R28-billion of annual revenue and lead to RFG’s delisting from the JSE.
Market reaction was immediate – Premier’s shares rose and RFG’s jumped sharply on the news.
The strategic case
Premier’s public rationale is straightforward: RFG brings a strong foothold in convenience meals, canned and long-life categories (Rhodes, Bull Brand, Pakco), which complement Premier’s bakery, staples and branded grocery portfolio (Blue Ribbon, Snowflake, Iwisa and others).
Premier, which traces its roots back more than 200 years, believes the deal would allow both sets of shareholders to participate in the future growth of a combined group with annual revenue of some R28bn and profit of about R1.7bn.
Premier CEO Kobus Gertenbach has framed the deal as an opportunity to “participate in the growth of the enlarged group” and to “unlock value and deliver significant synergies” while boosting Premier’s free float and liquidity.
RFG’s management — led by CEO Pieter Hanekom — has signalled continuity: RFG’s senior team are expected to remain in place to run operations within Premier, a move Premier says will limit integration risk and preserve customer service. The combined group is being presented as a diversified food champion with stronger procurement scale and broader channel access.
The financial mechanics
Structure: Share swap — 1 Premier share for 7 RFG shares; fractional entitlements paid in cash.
Deal value: Reuters estimates the transaction at roughly R5.7 billion based on the reference prices used.
Shareholder stakes: RFG holders to own ~22.5% of the enlarged Premier. Several major RFG shareholders have indicated support; Premier’s largest shareholders (including Brait and Titan) have backed the transaction.
Anchor senior equity analyst Sean Culverwell believes it is a decent-looking offer. He was not surprised by the transaction, as industry consolidation rumours have been circulating for some time, adding that the tie-up made “strategic sense” for both parties, given Premier’s earnings concentration in its Millbake segment, which is its largest division and focused on flour milling and baking, and RFG’s “strong presence in convenience foods and canned goods”.
He also thinks SA’s competition authorities “may be accommodating, given the limited overlap between the two product portfolios”.
Small Talk Daily analyst Anthony Clark agrees the RFG deal would offer Premier a “wide range of new business silos” and was an “interesting tie-up”.
Clark says RFG’s management “were a bit long in the tooth” and that the Premier deal would “inject new energy ideas and opportunity” into RFG.
Not everyone will see the deal as unambiguously positive. Consolidation in food processing and grocery value chains is a live public policy issue: the Competition Commission has recently amplified concern about rising retail margins and price stickiness across staple foods and is actively monitoring the sector’s structure as part of its Cost-of-Living work.
However, Gertenbach is confident it will be passed by SA’s competition authorities, saying it should be a “slam dunk”. He notes: “We don’t have a single product where we’re competing with each other, and we’re not asking for any layoffs of people. We made that very clear from the start.”
Source: Engineering News, Reuters, Competition Commission