Tiger Brands Ltd., South Africa’s largest food producer by market value, said last week’s acquisition of Mrs. H.S. Ball’s chutney would be a rare local deal due to a lack of opportunities in its home market.
Tiger, which said it would buy the chutney brand for 475 million rand ($55 million) from Unilever South Africa, is restricted by competition rules from buying companies in many segments due to its large market share, Thushen Govender, investor relations and business development executive, said in an interview today. The Johannesburg-based company is the country’s biggest producer of tomato sauce, mayonnaise, canned vegetables and baked beans.
“In South Africa there aren’t many acquisition opportunities out there for us where you can have the ability to acquire a big brand,” he said. “These sorts of opportunities are hard to come by.’
Tiger is instead expanding in West Africa and said in July it will buy Nigeria’s Dangote Flour Mills Plc for 31 billion naira ($200 million). Tiger, which produces brands such as Jungle Oats and Tastic Rice, wants to ‘‘de-leverage” its exposure to South African shoppers, Govender said.
Consumer spending in Africa’s biggest economy expanded 1.2 percent in the third quarter while one in four people are jobless. Confidence among buyers dropped two points to minus 3, according to an index compiled by First National Bank and the Bureau for Economic Research.
“The economic context we are operating in is recessionary,” Govender said. “We’ve been in this situation for the past two to three years.”
Tiger Brands last month reported a 5 percent rise in full year profit to 2.7 billion rand and said weak consumer spending would continue to weigh on Africa’s largest economy.