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04/12/2006
Premier Foods to buy RHM for £1.2bn
Premier Foods the owner of leading food brands including Branston and Ambrosia Chivers has reached a £1.2 billion agreement to take over RHM.
The acquisition of RHM, with top brands Hovis, Bisto, and Sharwoods, will make Premier the largest food producer in the UK. RHM shares rose significantly on the announcement of the takeover deal.
Premier said it believed the deal would deliver "substantial cost savings to enhance efficiency and competitiveness" with savings in the region of £85 million – no announcement has yet been made on jobs losses.
Premier Foods Chief Executive Robert Schofield said: "RHM is a business with strong brands and talented people. This acquisition brings Premier more great British brands with leading category positions which fit naturally in our portfolio. As we've done before, we intend to drive growth through innovation and investment whilst maintaining a tight control on costs.
This acquisition transforms our scale and we believe it will enable us to be a better partner with our retail customers."
Commenting on today's announcement, Jan du Plessis, Chairman of RHM, said: "The Board of RHM has long appreciated the commercial and financial logic of a combination with Premier to create the leading UK-focused food manufacturer.
This transaction achieves that objective and delivers substantial value to our shareholders through both the immediate offer premium and participation in the enhanced growth prospects of the enlarged Premier under its proven management team."
RHM employs 15,000 people in the UK and France. It had faced tough trading conditions and was engaged in a cost reduction programme. In its last trading statement RHM said that despite increasing advertising and wheat costs the company was on track.
Floated on the stock market two years ago, Premier Foods has recently acquired Oxo and Campbell.
(SP/KMcA)
The acquisition of RHM, with top brands Hovis, Bisto, and Sharwoods, will make Premier the largest food producer in the UK. RHM shares rose significantly on the announcement of the takeover deal.
Premier said it believed the deal would deliver "substantial cost savings to enhance efficiency and competitiveness" with savings in the region of £85 million – no announcement has yet been made on jobs losses.
Premier Foods Chief Executive Robert Schofield said: "RHM is a business with strong brands and talented people. This acquisition brings Premier more great British brands with leading category positions which fit naturally in our portfolio. As we've done before, we intend to drive growth through innovation and investment whilst maintaining a tight control on costs.
This acquisition transforms our scale and we believe it will enable us to be a better partner with our retail customers."
Commenting on today's announcement, Jan du Plessis, Chairman of RHM, said: "The Board of RHM has long appreciated the commercial and financial logic of a combination with Premier to create the leading UK-focused food manufacturer.
This transaction achieves that objective and delivers substantial value to our shareholders through both the immediate offer premium and participation in the enhanced growth prospects of the enlarged Premier under its proven management team."
RHM employs 15,000 people in the UK and France. It had faced tough trading conditions and was engaged in a cost reduction programme. In its last trading statement RHM said that despite increasing advertising and wheat costs the company was on track.
Floated on the stock market two years ago, Premier Foods has recently acquired Oxo and Campbell.
(SP/KMcA)
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Directors at UK chocolate producer Cadbury have approved a £11.5bn ($18.9bn) buy-out deal by American food firm Kraft. Kraft said the deal would create a "global confectionery leader". However, fears have been raised over jobs at Cadbury's Bournville and Somerdale manufacturing sites.
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