Johannesburg - AVI, the listed food company that owns I&J, would acquire Denny Mushrooms for R198 million, the company said yesterday in a statement to the JSE Securities Exchange.
Angus Band, the group managing director of AVI, said: "The acquisition fits with our strategy of growing our exposure to well-known consumer brands."
Denny sells fresh and processed mushrooms locally and in other African countries.
Rod Cairns, Denny's managing director, said he did not see the acquisition as a buyout but as a change in shareholding.
"AVI is a good partner and this will make Denny a better brand," Cairns said.
AVI does not have any mushroom products in its stable of brands that include Freshpak Rooibos, Baker's biscuits and I&J.
Simon Crutchley, AVI's business development director, said: "The mushroom industry shows good growth. More and more consumers are becoming interested in good products and want fresh food. Denny Mushrooms is a solid business, with a strong management team and that is why it was attractive to us."
Denny Mushrooms employs about 1 000 people and has operations in Gauteng, KwaZulu-Natal, Eastern Cape and Western Cape.
AVI closed 5c lower at R17.25. The sector rose 0.97 percent.