Varun Beverages Acquires South African Beverage Firm Bevco

On March 27, 2024, Varun Beverages Ltd informed in an exchange filing that the company had completed the acquisition of the South Africa-based Beverage Company (BevCo) along with its wholly-owned subsidiaries.

Details of the Acquisition

On Wednesday, PepsiCo’s largest franchise bottler, Varun Beverages Ltd, stated in a regulator filing that the company had acquired The Beverage Company Proprietary Limited, South Africa, along with its wholly-owned subsidiaries.

The company said, “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 (11:30 P.M. IST).”

They further added, “Pursuant to the provisions of Regulation 30 of the Listing Regulations read with Para B of Part A of Schedule III to the Listing Regulations, today (11:00 A.M. IST), our Company has issued a Corporate Guarantee on behalf of The Beverage Company Proprietary Limited, South Africa (a subsidiary of our Company).”

Varun Beverages issued a corporate guarantee amounting to ZAR 1,500 million (valid up to 42 months) in favour of FirstRand Bank Limited (acting through its Rand Merchant Bank division) (“Bank”) to secure credit facilities extended to Bevco by the Bank. The company said that this corporate guarantee has no impact on the company.

BevCo holds franchise rights from PepsiCo in South Africa, Eswatini and Lesotho. It also has distribution rights for Botswana and Namibia. BevCo owns beverage brands such as Refresh, Reboost, Coo-ee and JIVE. BevCo has 5 manufacturing facilities, of which 2 are in Johannesburg and one each in East London, Durban and Cape Town.

On March 28, 2024, the share price of Varun Beverages Ltd opened at ₹1,398.00, touching the day’s high at ₹1,405.00, as of 11:29 AM on the NSE.

About Varun Beverages Limited

Varun Beverages Limited is involved in the manufacturing of carbonated and non-carbonated beverages and packaged drinking water. In the quarter ended December 2023, the company reported a revenue of ₹1,846.30 crore, which is approximately 19.56% higher than ₹1,543.98 crore in the quarter ended December 2022.

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