On Tuesday, December 19, Pepsi India bottler Varun Beverages Ltd announced that it will acquire South Africa-based The Beverage Company (BevCo) for Rs 1,320 crore or $158.71 million.

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“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 as ‘Bevco’) with an option to accept minority co-investment from large equity fund subject to regulatory and other approvals (if any) including but not limited to PepsiCo Inc. and Competition Commission South Africa," VBL said in an exchange filing.

Meanwhile, shares of Varun Beverages closed at Rs 1,172.00 each, up 3.45 per cent on BSE today, December 19.

BevCo is a South African company that manufactures and distributes licenced PepsiCo and own-branded non-alcoholic drinks. PepsiCo Inc. has granted BevCo franchise rights in South Africa, Lesotho, and Eswatini. Additionally, it holds distribution rights in Namibia and Botswana. According to the filing, Bevco reached sales volumes of 117 million 8oz cases in FY23. In FY23, BevCo's net revenue was ZAR 3,615 million, or Rs 1,590 crore.

Varun Beverages, one of PepsiCo's largest franchisees outside the United States, has the provision to accept minority co-investment from a "large equity fund", the company said in a filing.

“The rising affluence of South African households has resulted in urbanization, coupled with longer workdays and emerging interest from female consumers, which has contributed to the growth in the industry," VBL said in an investor presentation following the acquisition announcement.