Varun Beverages' growth strategy could prove beneficial for investors

Varun Beverages (VBL) has strengthened its presence in Africa by acquiring two major beverage companies and completing the purchase of the remaining stake in a third entity.

 

The VBL board approved the acquisition of SBC Tanzania for Rs 1,304 crore and SBC Beverages Ghana for Rs 127 crore. These entities hold manufacturing and distribution rights for non-alcoholic ready-to-drink (NARTD) PepsiCo-branded beverages in Tanzania and Ghana.

 

The acquisitions will enable VBL to expand its footprint in East and West Africa, complementing its existing rights in much of southern Africa. The Tanzanian acquisition was made at a trailing multiple of 1.2x Enterprise