UNIVERSAL Robina Corp. (URC) is buying out its American partner for Hunt-Universal Robina Corp. (HURC), ending its 35-year-old partnership with the company while still keeping the licensing agreement for its products.
In a disclosure to the stock exchange on Monday, the Gokongwei-led firm said it has signed a share purchase agreement to buy ConAgra Grocer Products Company, LLC’s 50% stake in HURC for P3.18 million. This comprises of 1.4 million shares priced at P2.27 apiece.
URC will now gain full control of HURC, which it said will allow the company to “integrate and simplify its business operations as part of its Philippine business portfolio.”
Incorporated in 1983, HURC was established as a 50-50 joint venture between URC and ConAgra, which was previously called Hunt-Wesson International. Its primary purpose was to manufacture and sell various products such as vegetables, fish, dairy products, fruits, and other agricultural products in fresh, canned, or preserved variants.
HURC started operations a year later, with the launch of its first product, Hunt’s Pork & Beans. Since then, it has added new flavors and product formats in the ready-to-eat canned beans category.
The JV company then sold the license for the Hunt’s brand to Po-led Century Pacific Foods, Inc. in 2017, transferring to the latter the right to manufacture, sell, and distribute Hunt’s branded products.
After ConAgra’s exit from the partnership, URC said it will continue to manufacture and sell Swiss Miss Products under a trademark license agreement with the company.
URC’s buyout of ConAgra’s shares in HURC comes less than a week after it also took control of its partnership with Japanese firm Calbee, Inc. for Calbee-Universal Robina Corporation, Inc. (CURC). The company disclosed last Sept. 27 that it is buying Calbee’s 50% stake in the JV firm for P170.6 million, or 32.7 million shares at P5.217 each.
Calbee entered into the partnership with URC back in 2014 in order to grow the sales of its products and expand its market share in the country. However, the Japan-based snack manufacturer decided to end the joint venture after posting net losses for three consecutive years: P100.38 million in 2015, P85.33 million in 2016, and P95.65 million in 2017.
URC, however, has retained the licensing agreement to produce and sell Calbee brand products in the country. In the first half of 2018, URC booked a 23% drop in net income attributable to the parent to P4.81 billion, weighed down by the weaker peso, currency depreciation for its international subsidiaries, and setbacks in its domestic coffee business. Revenues meanwhile went up by 5.89% to P64.37 billion.
URC committed to invest P8 billion in capital expenditures this year to support its capacity expansion and to improve handling and distribution.
Shares in URC dropped 3.46% or P5 to close at P139.50 each at the stock exchange on Monday. — Arra B. Francia