Rainbow Chicken, South Africa’s largest processor and marketer of chicken, has announced its intention to acquire 64.2 per cent of SA food manufacturer Foodcorp for a cash consideration of R1.037 billion. Foodcorp will retain the remaining 23.9 per cent and will continue to manage the company.
Food player with significant scale
The acquisition will enable Rainbow to broaden its range of brands and categories to counter the cyclical nature of the food industry and become a food player with significant scale. ‘It will allow us to diversify and enter new attractive food categories with a range of respected and market leading brands while harnessing synergies and scale benefits‚’ comments CEO Miles Dally.
‘It is an important first step for Rainbow Chicken as a restructured business to pursue compelling acquisitions of consumer brands in strategic growth markets in the food sector in SA and the greater Sub Saharan Africa.’
Rainbow will conduct a rights offer‚ fully underwritten by Remgro‚ to contribute funding for strategic growth opportunities including the Foodcorp transaction. The proposed acquisition is subject to certain conditions‚ including the approval by the competition authorities.