Lucio Tan’s Foremost Farms acquires Cebu’s Virginia Foods Corp.

Beer and tobacco magnate Lucio Tan’s Foremost Farms, the country’s undisputed leader in animal farming, recently acquired the Cebu-based Virginia Foods Corp. from the Chiongbians for P380 million, according to an industry source.

The acquisition of Virginia Foods, which manufactures the El Rancho line of processed meat products dominating the Visayas and Mindanao markets, gives the Tan group a strong foothold in the South.

With the main Luzon market to fill in the gap, the same source said Tan would be willing to dig into his war chest to buy out Swift Foods Inc. (SFI) from the Concepcions of RFM Corp.

Although SFI has not been officially put up for sale, the source said it is almost certain the Concepcions would give up control of the company, one of the last remaining prized holdings of RFM Corp.

Over a span of just two years, RFM has disposed of several assets as it scrambles for cash to service its debts. Among the companies it has sold are Consumer Savings Bank, Psi Technologies and Cosmos Bottling Corp.

But with SFI, the Rizal-based Foremost Farms is expected to face stiff competition from other food-related companies one of which is Vitarich Corp., a publicly-listed poultry and livestock company controlled by the Sarmiento family.

In early August, RFM confirmed it was already in talks for a possible merger or strategic alliance from Vitarich Corp. In the case of Foremost, RFM’s financial advisor has received an indication of interest for SFI although no meeting nor discussions have been held.

The source said Tan is bent on acquiring SFI to challenge SMC in all aspects of agribusiness, front farming to processing, especially since Foremost lost a major client with SMC’s acquisition of Pure Foods Corp. last May.

SMC also has a strong presence in livestock and meat processing through the San Miguel Food Group (San Miguel Foods Inc., Monterey Foods, SMC Campofrio and Pure Foods).