Food & Beverage
PepsiCo bottler Varun Beverages finalizes purchase of South African bottling company BevCo.
TFW Bureau
Mar 28, 2024 - 2 min read
BevCo holds franchise rights from PepsiCo in South Africa, Lesotho and Eswatini. It also has distribution rights for Namibia and Botswana.
Varun Beverages Ltd, PepsiCo’s largest franchise bottler recently announced that it has completed the acquisition of South Africa-based Beverage Company (BevCo) 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 (VBL) 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 a 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 Refresh, 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.
