RFG acquires General Mills South African muffin business

RFG acquires General Mills' South African muffin business

Rhodes Food Group will acquire a General Mills South African unit that supplies frozen and dry-mix bakery products to the convenience sector.

The purchase price was not disclosed but the deal, struck yesterday (30 September), includes a "highly automated" factory in Johannesburg, RFG said in a regulatory filing.

Products are distributed nationally, primarily to the convenience channel. The product range includes dry and frozen bakery products such as Tubeset muffin batters, croissants, place and bake frozen preformed cookies and frozen pizzas. Muffin batters and muffins are "by far" the most significant sales stream. In total the business generated revenues of ZAR65m (US$4.7m) in the fiscal to end-May.

"Through the offering of innovative products, combined with convenience and ease of preparation, this business has become the preferred supplier and leader in muffins to the South African food service market," RFG said.

The South African group said the move was aligned with its strategy to expand its business through value accretive M&A. "The board believes that the frozen bakery category complements RFG's growing pie and pastries business, particularly with its focus on the distribution of these products to the convenience channel, and that good synergies will arise from the acquisition."

The deal is set to complete at the end of next month and is not subject to any conditions.