homebusiness Newscompanies NewsPepsiCo bottler Varun Beverages to acquire South Africa's Bevco for ₹1,320 crore; shares jump to record high
PepsiCo bottler Varun Beverages to acquire South Africa's Bevco for ₹1,320 crore; shares jump to record high
Varun Beverages on Tuesday said that it will acquire the entire business conducted by The Beverage Company Ltd, South Africa, and its wholly-owned subsidiaries, collectively known as 'Bevco' for ₹1,320 crore.
Varun Beverages Ltd (VBL), PepsiCo's largest franchise bottler, on Tuesday (December 19) announced its decision to acquire the entire business conducted by The Beverage Company Ltd, South Africa, and its wholly-owned subsidiaries, collectively known as 'Bevco' for ₹1,320 crore.
The shares of Varun Beverages surged over 17% to a record high of ₹1,380 apiece on Wednesday, December 19. The shares are up for the third day in a row.
"The Board of Directors of the company at their meeting held today inter-alia considered and approved to acquire 100% stake in the business conducted by The Beverage Company (Proprietary) Ltd, South Africa along with its wholly-owned subsidiaries (hereinafter referred to as "Bevco") with an option to accept minority co-investment from large equity fund subject," Varun Beverages said in a regulatory filing.
Bevco, engaged in the manufacturing and distribution of licensed (PepsiCo Inc) and own-branded non-alcoholic beverages, holds franchise rights from PepsiCo Inc in South Africa, Lesotho, and Eswatini, along with distribution rights for Namibia and Botswana.
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The company achieved significant sales volumes of 117 million 8oz cases in the financial year ending June 30, 2023, with a consolidated turnover of ZAR (South African rand) 3,615 million.
The acquisition will give VBL an option for minority co-investment from a large equity fund, securing 100% of the equity share capital of Bevco and its subsidiaries, according to a stock exchange filing.
This strategic move aligns with VBL's vision for expansion, allowing the company to tap into Bevco's established market presence and leverage its strong ties with PepsiCo Inc.
The indicative time frame for the completion of the acquisition is set on or before July 31, 2024, subject to regulatory approvals, including those from PepsiCo Inc and the Competition Commission South Africa, the company added.
The deal positions VBL to strengthen its position in the African beverage market, marking a significant milestone in the company's growth trajectory.
(Edited by : Shoma Bhattacharjee)
First Published: Dec 19, 2023 5:44 PM IST
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