Varun Beverages Ltd, the largest franchise bottler for PepsiCo, has announced the successful completion of its acquisition of the South Africa-based Beverage Company (BevCo) and its wholly-owned subsidiaries. The acquisition received the necessary approvals from PepsiCo Inc and the Competition Commission of South Africa. As of March 26, BevCo is now a subsidiary of Varun Beverages Ltd (VBL), as stated in a regulatory filing.
Additionally, VBL has provided a corporate guarantee of ZAR 1,500 million (equivalent to approximately INR 660 crore) to ensure credit facilities granted to BevCo by the FirstRand Bank in the region, the statement further noted.
Nevertheless, it also stated, “This corporate guarantee does not affect the company in any way.”
VBL announced in December 2023 that it would acquire all of BevCo’s stakes, including its wholly-owned subsidiaries, for an enterprise value of roughly ZAR 3 billion (about INR 1,320 crore).
Continue Exploring: PepsiCo’s key bottler Varun Beverages acquires South Africa-based Bevco for INR 1,320 Crore
BevCo holds distribution rights for Namibia and Botswana in addition to franchise rights from PepsiCo in South Africa, Lesotho, and Eswatini. It also owns beverage brands like JIVE, a bubbly lemonade, Coo-ee, a carbonated drink with classic flavours, Reboost, an energy drink, and Refreshhh, a drink with a high caffeine concentration.
BevCo operates five manufacturing facilities: two in Johannesburg, and one each in Durban, East London, and Cape Town. These facilities boast a combined installed capacity of 3,600 BPM (bottles per minute).
In a previous regulatory disclosure, VBL stated that the acquisition would facilitate the expansion of its geographical presence in Africa.
Continue Exploring: Varun Beverages eyes untapped markets with focus on production capacity and distribution expansion
South Africa is recognised as the continent’s largest soft drinks market. Projections indicate that it is expected to grow at a CAGR of 5.3% over the next four years until 2027.
VBL, which follows the calendar as a financial year, saw its net revenue rise to INR 16,042.58 crore in 2023, marking a notable increase of 21.8 percent.
With a partnership spanning over three decades with PepsiCo, VBL is expanding its business by increasing the number of licensed territories and sub-territories.
Continue Exploring: Pepsi India bottler Varun Beverages’ Q4 profits soar by 77% driven by robust demand and international expansion
