Varun Beverages Completes Acquisition Of South African Bottler BevCo

Varun Beverages Ltd, PepsiCo's largest franchise bottler, on Wednesday said it has completed the acquisition of South Africa-based Beverage Company along with its wholly-owned subsidiaries.

The acquisition was done after receipt of requisite approvals from PepsiCo Inc and Competition Commission South Africa and now BevCo has become a subsidiary of the company from March 26, Varun Beverages Ltd in a regulatory filing.

VBL has also issued a corporate guarantee amounting to ZAR 1,500 million (around Rs 660 crore) to secure credit facilities extended to BevCo by the FirstRand Bank there, it added.

However, it also added: "There is no impact of this corporate guarantee on the company."

In December 2023, VBL announced its plans to acquire 100% stake in BevCo, along with its wholly-owned subsidiaries at an enterprise level, valued at about Rs 1,320 crore (about ZAR 3 billion).

BevCo holds franchise rights from PepsiCo in South Africa, Lesotho and Eswatini. It also has distribution rights for Namibia and Botswana. It also owns beverage brands such as Refreshhh, a high caffeine content drink, Reboost, an energy drink, Coo-ee, a carbonated drink in classic flavours and JIVE, which is a fizzy Lemonade.

BevCo has five manufacturing facilities - two in Johannesburg and one each in Durban, East London and Capetown - and has an installed capacity of 3,600 BPM (bottles per minute).

"The acquisition will enable VBL to expand its geographical footprint in Africa," VBL had said in a regulatory disclosure earlier.

South Africa is the largest soft drinks market in the African continent, which is expected to grow at a CAGR of 5.3% for the next four years till 2027, it had said.

VBL, which follows the calendar as a financial year, had posted its net revenue of Rs 16,042.58 crore, up 21.8% in 2023.

Its association with PepsiCo is over three decades old. It is increasing the number of licensed territories and sub-territories to expand its business.