Varun Beverages, the largest franchise bottler of PepsiCo, has announced the acquisition of Twizza, a South Africa-based firm that manufactures and distributes non-alcoholic beverages. This move is expected to boost Varun Beverages' presence in the African market.
About the Acquisition
The acquisition is valued at ZAR 2,095 million (Rs 1,118.7 crore) and will be paid in cash. Twizza has three manufacturing facilities in Cape Town, Queenstown, and Middelburg, with a combined annual production capacity of 100 million cases.
Impact on Varun Beverages
The acquisition will enable Varun Beverages to penetrate deeper into the South African market through Twizza's manufacturing facilities. Twizza also has backward integration facilities at all plants, with a total of 5 preform and 1 closure line.
Previous Acquisitions
In March 2024, Varun Beverages acquired The Beverage Company, South Africa, along with its wholly-owned subsidiaries BevCo. This acquisition allowed the company to consolidate its presence in franchised territories in South Africa, Lesotho, and Eswatini, as well as territories with distribution rights in Namibia, Botswana, Mozambique, and Madagascar.
Analyst Views
Brokerage firm Citi has reiterated its 'Buy' rating on Varun Beverages with a target price of Rs 675 per share, an upside of 44% from Friday's closing price. The analysts believe that the acquisition could help further scale up the company's soft drinks business in Africa.
Key Facts
- Varun Beverages is one of the largest franchisees of PepsiCo in the world (outside the USA)
- In 2024, Varun Beverages' revenue was at Rs 20,007.7 crore, with 1,124 million cases sold globally
- The acquisition is subject to regulatory and other approvals, with an expected completion date of June 30, 2026
Remember, this is perspective, not prediction. Do your own research before making any investment decisions.