Groot Drakenstein / ZA. (rfg) Shareholders are advised that Rhodes Food Group’s wholly owned subsidiary Rhodes Food Group Proprietary Limited and General Mills Inc. have entered into an agreement dated 30 September 2015 in terms of which Rhodes Food will acquire the Foodservice business of General Mills from General Mills.
General Mills launched its Foodservice business in 1995 and conducts its manufacturing business from a highly automated facility in Johannesburg. Its products are distributed nationally, primarily to the convenience channel. The product range includes dry and frozen bakery products that are quick and easy to use. This includes Tubeset muffin batters, croissants, cinnamon scrolls, place and bake frozen preformed cookies, frozen pizzas, dry bakery mixes and ready-to-eat muffins, the muffin batters and muffins being by far the most significant sales item. 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.
The board of RFG is of the opinion that the Acquisition presents an attractive investment opportunity which is aligned with RFG’s strategy of expanding its business operations through value accretive acquisitions. 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.