VBL has also issued a corporate guarantee amounting to South African Rand (ZAR) 1,500 million (around Rs 660 crore) to secure credit facilities extended to BevCo by the FirstRand Bank there
New Delhi: Varun Beverages Ltd, PepsiCo’s largest franchise bottler, on Wednesday said 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.
