Varun Beverages announces ₹1,631-crore acquisitions in Tanzania, Ghana and India to expand global footprint

Varun Beverages, on November 12, outlined expansion plans with three major acquisition proposals aimed at bolstering its presence in Africa and enhancing its production capabilities in India. These acquisitions include a 100% stake in SBC Beverages Tanzania Limited (SBCT), a 100% stake in SBC Beverages Ghana Limited (SBCG), and the remaining 39.93% stake in Lunarmech Technologies Pvt Ltd, a producer of plastic closures for PET bottles currently used by Varun Beverages.

The acquisition of SBCT is valued at approximately ₹1,304 crore, based on an equity valuation of $154.5 million. SBCT, which operates five manufacturing facilities across Tanzania in Dar-es-Salaam, Mbeya, Arusha, and Mwanza, achieved net revenues of ₹1,505 crore in the fiscal year ending March 2024, producing 74 million 8oz cases. It currently holds a 44% market share in Tanzania’s carbonated soft drinks market.

SBCT's facilities include 12 beverage manufacturing lines (nine for returnable glass bottles and three for PET bottles) and produce a range of PepsiCo products, including Pepsi, Pepsi Max, 7UP, 7UP FREE, Mirinda, and Mountain Dew, as well as SBCT’s own energy drink brand, Supa Komando.

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Similarly, the proposed acquisition of SBC Beverages Ghana Limited is valued at ₹127 crore, with an equity valuation of $15.06 million. Located in Accra, Ghana, SBCG achieved net revenues of approximately ₹32 crore with a sales volume of 2.25 million 8oz cases during the fiscal year ending March 2024.

SBCG’s product portfolio includes popular PepsiCo brands such as Pepsi, Pepsi Max, 7UP, and Mirinda, as well as an energy drink branded as Cheetah. With just one manufacturing facility and two returnable glass bottle manufacturing lines, SBCG holds 87% market share by volume in Ghana's carbonated soft drinks segment.

The third acquisition involves Lunarmech Technologies Pvt. Ltd, where Varun Beverages intends to purchase the remaining 39.93% stake for ₹200 crore. Lunarmech, currently a Varun Beverages subsidiary with a 60.07% stake held by Varun Beverages, reported a net revenue of ₹183 crore for the year ending March 2024.

The company operates a production facility in Jaipur, with another under construction in Jammu, dedicated to producing plastic closures for PET bottles used by Varun Beverages. Upon completion, this acquisition will make Lunarmech a wholly-owned subsidiary, enhancing Varun Beverages' production synergies and supply chain efficiencies in its domestic operations.

The shares of the company ended over 1% in the red on Tuesday, November 12.

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