The acquisition is valued at about Rs 1,320 crore (US$158.28M).
Varun Beverages Ltd (VBL), PepsiCo’s largest franchise bottler, has successfully concluded the acquisition of South Africa-based Beverage Company BevCo and its subsidiaries.
In a stock exchange filing, Varun Beverages said that as of March 26, 2024, Bevco has become a subsidiary of Varun Beverages, on receiving all the required approvals, including from PepsiCo Inc, Competition Commission South Africa, among others.
As part of the acquisition, VBL has issued a corporate guarantee of ZAR 1,500 million (US$78.88M) to secure credit facilities extended to BevCo by the FirstRand Bank. However, VBL clarified that this guarantee will have no impact on the company.
BevCo, holding franchise and distribution rights for PepsiCo products in South Africa, Lesotho, Eswatini, Namibia, and Botswana, owns popular beverage brands such as Refreshhh, Reboost, Coo-ee, and JIVE.
It operates five manufacturing facilities with a combined installed capacity of 3,600 bottles per minute across various cities in South Africa.
In December 2023, Varun Beverages had announced the acquisition of South Africa’s Bevco for ₹1,320 crore. The company’s board approved the acquisition of 100% stake in The Beverage Company, South Africa, along with its wholly-owned subsidiaries.
The strategic acquisition of Bevco aligns with Varun Beverages’ vision for expansion, enabling the company to tap into the South African company’s established market presence and leverage its strong ties with PepsiCo Inc, it said.
South Africa, being the largest soft drinks market on the continent, presents substantial growth opportunities. According to Statista, the South African soft drinks market is anticipated to grow at annual CAGR of 6.59 percent until 2028.
In the quarter ended December 2023, VBL reported a revenue of ₹1,846.30 crore (US$221.3M), marking a 19.56 percent increase compared to the same period in the previous year.
Source: Food Business Africa
