Woolworths Moves to Bring Key Food Supplier In2food Into Its Business

Woolworths Moves to Bring Key Food Supplier In2food Into Its Business. Woolworths is seeking to strengthen its private-label food offering through the proposed acquisition of in2food, following a recommendation by the Competition Commission that the Competition Tribunal approve the transaction.

Woolworths announced in March that it had entered into an agreement to acquire 100% of in2food Holdings from its founders, Old Mutual Private Equity and other shareholders. The proposed transaction would bring the long-standing supplier relationship between the two businesses closer to an ownership structure.

In2food has been a supplier to Woolworths for more than 30 years and is described as having played a longstanding role in producing products sold under the Woolworths brand.

The South African food manufacturer generates more than R5 billion in annual revenue and produces more than 3.2 million packs each week across eight manufacturing facilities.

Its product range covers freshly prepared convenience food, fresh produce, long-life and ambient products, as well as bakery products. Woolworths is the company’s largest customer.

The proposed acquisition therefore involves a business already closely connected to Woolworths’ food operation. Woolworths has said its relationship with in2food has involved collaboration around food products focused on quality and innovation and aligned with the retailer’s premium positioning.

According to Woolworths, bringing in2food into the group would further support product quality, innovation and availability. The retailer also expects the transaction to strengthen supply chain resilience while improving speed-to-market, agility and efficiencies.

The deal could also provide opportunities for in2food to expand its existing food service and export businesses, according to Woolworths.

If the acquisition is approved and implemented, in2food will continue operating as a standalone business within the Woolworths group. Its existing senior leadership team will remain in place, with the structure intended to maintain continuity in the business and preserve its entrepreneurial culture.

The Competition Commission’s recommendation includes conditions attached to the proposed transaction.

Woolworths will be required to continue procuring from competing suppliers for a specified period following implementation of the merger. The parties will also be subject to a moratorium on retrenchments resulting from the transaction.

The recommendation now places the proposed acquisition before the Competition Tribunal for consideration.

For Woolworths, the transaction would bring a major supplier of products associated with its food business into the same group after more than three decades of working together. It would also give the retailer ownership of a business with manufacturing operations spanning multiple food categories and facilities.