Varun Beverages Acquires PepsiCo Bottlers in Tanzania & Ghana

Varun Beverages Ltd. (VBL), one of PepsiCo Inc.’s largest global franchisees, has announced major acquisitions to expand its position in Africa. The company has acquired 100% ownership in SBC Tanzania and SBC Beverages Ghana and plans to fully own its subsidiary Lunarmech Technologies Pvt. Ltd. Its product portfolio includes PepsiCo staples like Pepsi, Pepsi Max, 7UP, and Mirinda etc.

Expansion in Africa

The acquisition of SBC Tanzania for Rs.1,304 crore and SBC Beverages Ghana for Rs.127 crore shows VBL’s expansion in the African market. SBC Tanzania operates five manufacturing facilities and generated revenue of Rs.1,505.3 crore in FY24. Meanwhile, SBC Ghana has one facility and reported revenue of Rs.32 crore in the same period. Both acquisitions are subject to regulatory approvals, including clearance from PepsiCo Inc. and respective revenue authorities.

Ravi Jaipuria, chairman of Varun Beverages Ltd. (VBL), talked about Africa as a promising market during an October analyst call, stating, “Looking ahead over the next 20 years, Africa appears very bullish.” 

Supply Chain with Lunarmech

Varun Beverages Ltd. (VBL) will also acquire the remaining 39.93% stake in Lunarmech Technologies Pvt. Ltd. for Rs.200 crore, making it a wholly-owned subsidiary. Lunarmech, which specializes in producing plastic closures for PET bottles, recorded a revenue of Rs.183.4 crore in FY24. This acquisition aims to consolidate VBL’s supply chain operations.

Stock & Strategy

Shares of Varun Beverages Ltd. (VBL)  have climbed around 18.9% YTD and over 47% over the past year, currently trading at Rs.588.85. The company plans to raise up to Rs.7,500 crore through a qualified institutional placement (QIP) to fund strategic expansions, including snack manufacturing rights across Africa.

Conclusion: With these acquisitions, VBL isn’t just expanding, it’s setting up for a long-term play in a high-growth market. Whether it’s bottling Pepsi or producing snacks, VBL’s Africa focus shows confidence in the times ahead.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.