MANILA, Philippines - Macay Holdings Inc. and Zest-O Corp., both owned by former ambassador Alfredo Yao, signed a deed of non-competition undertaking.
The Letter of Undertaking, which details the business strategies of the two companies, ensures their products will not compete with each other.
“Zest-O shall not obstruct, impede or otherwise prevent or delay Macay’s development of any food and beverage product that will compete, directly or indirectly, against those produced or distributed by Zest-O at any time, and whether such developments stem from Macay’s research and development efforts or from mergers, acquisitions, joint ventures, licensing, distribution or other similar arrangements with third parties,” the LOU said.
Macay shall also have a right of first refusal to engage in any activity involving any and all future food and beverage product development opportunities as both parties agreed.
This would apply to Macay or Zest-O or in any jurisdiction that may arise from mergers, acquisitions, joint ventures, licensing, distribution or other similar arrangements with third parties.
Macay shall have the right of first refusal to acquire, in whole or in part, Zest-O’s carbonated soft drinks such as fruit soda, root beer, and cola as well as any planned or future carbonated soft drinks products that Zest-O may develop or launch, the Letter also stated.
In the event that Macay exercises its right of first refusal. Zest-O shall not develop, launch or offer, at any time in the future, any carbonated softdrinks product without Macay’s prior consent.
“To avoid duplication of development efforts and conflict-of-interest situations, Macay shall be given priority to develop any CSD product contemplated by both the corporation and Zest-O, and any product other than the Zesto Products, and Zest-O will not develop any products that compete with the products developed by the corporation,” Macay said.
Macay, which earlier acquired the RC Cola brand, seeks to become a diversified food and beverage company.
The company said it could grow at a slightly faster pace than the local softdrink industry’s projected five percent growth this year with RC Cola’s plan to expand in untapped areas in the country including those dominated by Coca-Cola Philippines and Pepsi Cola.
Macay has set aside about P2 billion next year to fund its operations. It intends to spend P4 billion over the next three years to fund its ongoing expansion program.