Varun Beverages - one of the largest franchisee of PepsiCo Inc - has acquired full ownership of two African companies making and distributing Pepsi and other related brands of beverages housed under the franchise, the company said on November 12.
Billionaire Ravi Jaipuria’s VBL has taken 100% control of SBC Tanzania and SBC Beverages Ghana, for Rs 1,304 crore and Rs 127.1 crore respectively. The company also said it is planning to acquire the remaining 39.93% stake in a subsidiary - Lunarmech Technologies - for Rs 200 crore. Varun Beverages holds 60.07% in Lunarmech, and after the transaction, it will become a wholly-owned subsidiary of VBL.
Lunarmech makes plastic caps for PET bottles, and had clocked a revenue of Rs 183.4 crore in FY24, with manufacturing facilities in Jaipur and Jammu. Lunarmech's production was being used in-house by VBL.
SBC Tanzania has five manufacturing facilities with a revenue of Rs 1,505.3 crore for FY24, while SBC Ghana has one manufacturing facility, delivering a revenue of Rs 32 crore last fiscal. Both these acquisitions will help VBL expand its geographical footprint in Africa, the company said. The deals are expected to be completed latest by March 2025.
"There are opportunities outside India, particularly in Africa, which is the next horizon for growth. Looking ahead over the next 20 years, Africa appears very bullish," Ravi Jaipuria told analysts in October during a concall.
VBL said the deals are subject to approval from PepsiCo Inc and tax clearance from Ghana and Tanzania's revenue authorities.
"We have been getting opportunities in the past and hope we will keep on getting new opportunities. We want to have a war chest available with us so that when the opportunity is available, we can raise debt at that point of time," Ravi Jaipuria had told analysts during a concall in October.
Varun Beverages has kept its focus on growing both Indian and international markets, and the operations in Africa are aimed to to drive further growth as the company capitalizes on emerging demand trends, the company said.
Varun Beverages - biggest bottler for PepsiCo in India - plans to raise up to Rs 7,500 crore through a qualified institutional placement (QIP) in November to raise funds, Moneycontrol reported last month. VBL had said will use the funds for investments to fund the growth and enter into new territories, and making strategic acquisitions.
Varun Beverages has also said it is looking to expand the snack business in Africa, which promises huge potential. In Africa, PepsiCo does not produce snack foods anywhere except South Africa. VBL said it has the rights from PepsiCo to make snack food across Africa as it is more expensive to transport it.
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