Major Food Industry Consolidation Through Share Exchange
In a significant development within South Africa’s food production sector, Premier Group will acquire RFG Holdings through a stock swap arrangement that will result in RFG shareholders collectively owning about 22.5% of the enlarged entity, according to reports from both companies. The transaction, which requires regulatory approvals, represents one of the larger recent consolidations in the fast-moving consumer goods sector.
Transaction Structure and Share Exchange Terms
Under the terms of the agreement, RFG shareholders will be offered one Premier share for every seven RFG shares held. Sources indicate the share swap ratio is based on a reference price of R22 per RFG share and R154 per Premier share. Following completion of the transaction, RFG will delist from the JSE Limited, where both companies are currently listed.
Strategic Rationale and Financial Scale
The transaction reportedly presents an opportunity for both RFG and Premier shareholders to participate in the growth of an enlarged group that would generate annual revenue of almost R28-billion and a profit after tax of R1.7-billion, according to Premier Group CEO Kobus Gertenbach. The combined entity’s projected net income would position it as a major player in the food production landscape.
Analysts suggest the deal follows a trend of industry consolidation similar to developments seen in other markets, such as the S&P 500 inclusion premium phenomenon that has driven merger activity in other regions.
Complementary Business Models and Integration Benefits
“RFG is a highly attractive acquisition opportunity for Premier, with its market-leading position in convenience meal solutions, strong market share positions across key product categories and its portfolio of well-established brands,” Gertenbach stated in the announcement. The report emphasizes that while the two businesses share common customers, there is reportedly no overlap in their product offerings, suggesting limited integration risk.
The transaction structure appears designed to avoid the kind of integration challenges that have plagued other acquisitions, reminiscent of the engineering failures that have occurred in other industries when combining complex operations.
Market Position and Growth Trajectory
Premier’s market capitalisation since listing on the JSE in March 2023 has reportedly increased by R13.1-billion to R19.8-billion, according to the companies’ disclosures. The company has delivered a return on invested capital of 24.9% as at March 31, 2025, while investing R2.8-billion over the past five years in its ongoing capital investment programme.
This growth trajectory appears stronger than some international economic indicators, such as the modest growth reported in other developed markets recently.
RFG’s Expansion History and Market Position
RFG, which listed on the JSE in October 2014, has a market capitalisation of R4.3-billion according to the announcement. Since its listing, the company has completed ten acquisitions to expand and diversify its product offering and customer base, while extending its market-leading brands into new product categories.
This expansion strategy mirrors approaches seen in other high-growth sectors, including the rapid commercial scaling demonstrated by companies like Zepto in the quick-commerce space.
Leadership Continuity and Shareholder Support
RFG’s senior management are expected to remain in their current roles to run the RFG operations within Premier, which sources indicate will ensure continuity in RFG’s manufacturing operations and customer service. The transaction is subject to approval by RFG shareholders, as well as competition and regulatory authorities.
Shareholders collectively holding 77.7% of RFG’s shares in issue have reportedly expressed their intention to vote in favor of the transaction. The deal’s infrastructure requirements may benefit from developments in other sectors, such as the hyperscale data center capacity coming online to support expanded operations.
Regulatory Process and Timeline
While the transaction does not require approval from Premier shareholders in terms of JSE Listings Requirements, Premier’s largest shareholders, Brait and Titan, along with its major institutional shareholders, are reportedly supportive of the transaction. The companies have not disclosed an expected timeline for completion, noting that regulatory approvals must first be obtained.
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