Premier’s Mega Merger: Competition Commission Backs RFG Acquisition

Premier’s Mega Merger: Competition Commission Backs RFG Acquisition. The Competition Commission has recommended that the Competition Tribunal approve Premier Food’s acquisition of rival producer RFG, marking a significant consolidation in South Africa’s food industry. The proposed transaction combines two of the country’s most recognisable food groups, bringing together a portfolio of iconic brands and creating a business with enhanced scale and operational reach.

Premier, founded in 1824 as a bakery, owns leading brands including Mister Sweet, Iwisa, Super C, Blue Ribbon, and Rascals. RFG’s portfolio includes Rhodes Quality, Magpie, Bull Brand, and Mama’s Pies, with production facilities spanning South Africa and Eswatini. Premier announced in October 2025 its offer to acquire all ordinary shares of RFG in exchange for Premier shares, creating a combined group with an estimated annual revenue of R28 billion and profit after tax of R1.8 billion.

Under the deal, RFG’s senior management will continue to run day-to-day operations, ensuring continuity and leveraging the company’s operational expertise. Shareholders of RFG are set to receive a premium on their shares, ranging from 7.2% to 37.5% depending on the valuation method used, reflecting the strategic value of the merger. Premier also expects the issuance of new shares to increase its free float on the JSE, enhancing liquidity.

The Competition Commission indicated that the transaction is unlikely to reduce competition in any market. To address potential employment concerns, both companies have committed not to retrench any employees as a result of the merger for three years. Additionally, Premier has pledged to increase its annual enterprise and supplier development spend over the same period.

Investment analysts highlight that the merger is strategically and financially sound. Sean Culverwell of Anchor Capital noted that Premier’s Blue Ribbon brand positions the company as a market leader in milling and baking, with growth driven by revenue expansion, operating margin improvement, and reduced finance costs. He added that the deal mitigates concentration risk, improves share liquidity, and offers potential for dividend increases or share buybacks, providing immediate earnings accretion and long-term value for shareholders.

The recommendation from the Competition Commission now moves to the Tribunal, bringing the merger one step closer to completion and signalling a transformative moment in South Africa’s food production sector.