Varun Beverages Ltd (VBL), PepsiCo’s largest franchise bottler, has successfully concluded the acquisition of South Africa-based Beverage Company BevCo and its subsidiaries.
The acquisition, valued at about Rs 1,320 crore (US$158.28M), has received necessary approvals and has officially made BevCo a subsidiary of VBL as of March 26, 2024.
Recall: Varun Beverages to acquire PepsiCo’s South Africa bottler Bevco
In a regulatory filing, VBL stated, “After receipt of requisite approvals (including but not limited to PepsiCo Inc. and Competition Commission South Africa), our Company has completed the acquisition of the Company, The Beverage Company Proprietary Limited, South Africa, along with its wholly-owned subsidiaries (hereinafter referred as “Bevco”). Accordingly, Bevco has become a subsidiary of our Company with effect from March 26, 2024 .”
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.
VBL’s acquisition of BevCo is expected to significantly expand its geographical presence in Africa.
“The acquisition will enable VBL to expand its geographical footprint in Africa,” VBL 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.
This acquisition aligns with VBL’s strategic objectives to strengthen its position in the beverage market and capitalize on emerging opportunities for growth in Africa.
