South African billionaire Christo Wiese’s Premier Group faces bid to overturn R6 billion RFG merger

South African billionaire Christo Wiese’s Premier Group is fighting an attempt by the Competition Commission to revoke approval of its nearly R6 billion acquisition of RFG Holdings, placing one of the country’s biggest food industry deals under renewed regulatory scrutiny.

The Competition Commission has applied to the Competition Tribunal to overturn the approval granted for Premier’s acquisition of RFG, arguing that the companies failed to disclose information about the contemplated closure of RFG’s fruit canning facility in Tulbagh, Western Cape, during the merger review.

The regulator said the proposed closure was material because it could remove almost half of South Africa’s fruit canning capacity and eliminate Langeberg’s only competitor in the market. It also raised concerns about employment and the impact on farmers and exports. 

Premier, which is partly owned by Wiese through Titan Premier Investments, rejected the Commission’s characterisation of events and said it would oppose the application. In a Johannesburg Stock Exchange filing on October 8, the company said there was no plan to close the Tulbagh facility when the merger was being reviewed and that the decision was taken only after the transaction was implemented.

Premier said the decision followed worsening conditions in the canned deciduous fruit industry, including declining global demand, pressure in export markets, rising input costs and lower capacity utilisation. The company said it had engaged with the Commission since July and provided documentation concerning the decision-making process. 

The Commission is seeking an order that would revoke the merger approval and require the transaction to be refiled and reconsidered, or alternatively impose additional or amended conditions. It has also sought urgent interim relief to preserve the Tulbagh facility’s ability to operate as a canning plant while the case is considered. 

Premier completed the RFG transaction earlier this year after the Competition Tribunal approved the deal in April. The acquisition, originally valued at up to R5.9 billion, was structured as a share swap and created a larger food producer with combined annual revenue of close to R28 billion.

Wiese’s Titan Premier Investments previously held a 45.53% indirect stake in Premier, although his ownership was diluted following the RFG transaction.

Premier said on October 8 that consultations concerning the Tulbagh facility had concluded, with 407 of the 409 affected employees accepting voluntary severance packages and the remaining two staying with the group. The company said no retrenchments would be implemented.

The Competition Tribunal will ultimately determine whether the merger approval should be revoked, reconsidered or left in place with revised conditions.