RFM Corp. to buy Unilever group’s Royal pasta
Screengrab from https://www.rfmfoods.com/
MANILA, Philippines — Concepcion-led RFM Corp. has struck a deal to acquire the Unilever group’s Royal brand and pasta business for $47.8 million, cementing its leadership in this food category.
In a disclosure to the Philippine Stock Exchange on Thursday, RFM said the transaction value of $47.8 million or over P2.1 Billion covered mainly the Royal trademarks, goodwill and inventories. The deal is subject to customary closing requirements.
RFM president and CEO Jose A. Concepcion III said that the acquisition of the Royal brand – the number two pasta brand in the Philippines – would allow RFM to strengthen its market leadership in the pasta category. RFM currently also owns Fiesta, the leading pasta brand in the market today.
Fiesta and Royal brands lead other brands in offering spaghetti, macaroni, and pasta- and-sauce bundles that provide more convenient easy-to-prepare pasta meals.
Concepcion hopes to grow the pasta market by offering ready-to-cook and affordable pasta meals to Filipino consumers.
Concepcion said that Royal brand, which had a premium price point, would not only strengthen market leadership for the company in the segment but would also complement the value-positioning of its Fiesta brand.
The Royal brand has a 58-year heritage in the Philippines, known and loved by generations of Filipino families.
RFM disclosed in October last year that it had raised around P1.6 billion out of an equity deal to prepare itself for expansion and possible acquisitions. Concepcion said that proceeds from that offering helped fund this acquisition, in addition to internally generated cash-flows.
Moving forward, the disclosure said RFM would continue to look for acquisitions that will strengthen its position in the food and beverage categories.
“The acquisition is expected to boost top-line revenues of RFM, and will more than offset the lost revenues out of its selling the Swift meat business in late 2012,” the disclosure said.
Aside from pasta, RFM is also in a joint venture with Unilever for Selecta ice cream. The company is seeing a positive outlook with its other brands such as White King cake and sauce mixes, baked bread, Selecta milk and Sunkist beverage, as consumer spending promises to be strong this year, Concepcion added.
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