Johannesburg -- Rainbow Chicken, South Africa’s largest chicken producer, will buy a minority stake in Zam Chick of Zambia as it expands in sub-Saharan Africa.
Rainbow will pay $14.5 million for 49 percent of Zambeef’s Zam Chick, the Durban, South Africa-based company said in a statement.
Zambeef will continue the daily management of the business, while Rainbow will provide technical assistance, it said.
The deal with Lusaka-based Zambeef, which also has operations in Ghana and Nigeria, opens the way for further cooperation between the companies, Rainbow said.
Rainbow offered 1 billion rand ($113 million) for control of Foodcorp, South Africa’s third-largest food producer, on November 14 and plans to raise 3.9 billion rand selling stock to existing investors to fund the transaction.
“The transaction will be funded from a portion of the proceeds from the rights offer,” the company said.
Rainbow, 73.4 percent owned by Remgro, an investment company based in Stellenbosch near Cape Town, offered shareholders 80 securities for every 100 they own at 14.20 rand on December 6.
The offer is underwritten by Remgro and will be used to fund the takeover of closely held Foodcorp, which will increase Rainbow’s range to add items from peanut butter to dog food. - Bloomberg