Leading bottler for PepsiCo, Varun Beverages Ltd (VBL) on Tuesday said it has acquired 100 per cent stake in South Africa-based the Beverage Company (BevCo) along with its wholly-owend subsidaries. The proposed transaction, at an enterprise level, is valued at about ₹1,320 crore (about ZAR 3 billion), it added.

“The Board of Directors of the Company at their meeting held today inter-alia considered and approved to acquire 100 per cent 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,” the company said in a BSE filing.

Bevco is engaged in the business of manufacturing and distribution of beverages licenced by PepsiCo Inc. It has franchise rights from PepsiCo Inc in South Africa, Lesotho and Eswatini. It also has distribution rights for Namibia and Botswana. The company also has a portoflio of its own branded non-alcoholic beverages in South Africa.

Expanding footprint

“The acquisition will enable VBL to expand its geographical footprint in Africa,” it stated in its BSE filing. BevCo’s net revenue for FY23 was about ₹1,590 crore (ZAR 3,615 million) in FY23.

BevCo has five manufacturing facilities across Johannesburg, Durban, East London and Cape town in the region. It manufactures and sells PepsiCo franchise brands, including 7UP FREE, Mirinda, Mountain Dew, Pepsi, Pepsi Light and Pepsi.

South Africa is the largest soft drinks market in Africa. “The rising affluence of South African households has resulted in urbanisation, coupled with longer workdays and emerging interest from female consumers, which has contributed to the growth in the industry,” the compay said in an investor presentation.