MANILA, Philippines - Food and beverage company RFM Corp., which makes Fiesta Pasta, is buying the Unilver group's Royal Pasta business for $47.8 million (around P2.1 billion).
In a statement, RFM president and CEO Jose A. Concepcion III said the acquisition of the Royal Pasta brand will allow the company to solidify its market leadership in the pasta category in the country.
RFM's Fiesta brand is currently the number 1 pasta brand in the Philippines, while Royal brand is number 2. Both brands offer spaghetti, macaroni, and pasta-and-sauce bundles.
Concepcion said the Royal brand, which has a premium price point, would complement the value-positioning of the Fiesta brand.
He added the acquisition will be funded by proceeds from the top-up rights offering it conducted last year. Last October, RFM said it has raised around P1.6 billion out of a top-up rights offering to prepare itself for expansion and possible acquisitions.
"The acquisition is expected to boost topline revenues of RFM, and will more than offset the lost revenues out of its selling the Swift meat business in late 2012," the company said.
RFM said it is still looking for acquisitions to strengthen its position in the food and beverage categories.
At present, RFM and Unilever are also in a joint venture for Selecta ice cream.