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Varun Beverages a step closer to pan-India ownership of PepsiCo franchisee rights
Photo Credit: Reuters

Varun Beverages Ltd said on Monday that its board has approved a plan to acquire beverage giant PepsiCo India’s franchisee rights in the south and west of the country.

The Ravi Jaipuria-led company said in a stock-exchange filing that it will acquire the rights for a bottling, sales and distribution footprint in seven states and five union territories from PepsiCo India Pvt. Ltd.

Once the formalities are completed, Varun Beverages will be a franchisee for PepsiCo products across 27 out of 29 Indian states and all seven union territories, the company said. 

The proposed acquisitions are in line with Varun Beverages' strategy to expand to adjoining contiguous territories and will help to achieve higher revenues and profitable growth, it added.

The development comes days after Varun Beverages had announced a plan to acquire franchisee rights of PepsiCo in three states from SMV Group, which is controlled by Ravi Jaipuria's brother Surya Kant Jaipuria. In August 2017, Varun Beverages had acquired PepsiCo's rights in two states from SMV.

Varun Beverages has yet to provide financial details for any of the recently-announced transactions.

Varun Beverages is one of the largest franchisees in the world (outside the US) of carbonated as well as non-carbonated beverages sold under brands owned by PepsiCo.

The company produces and distributes beverages such as Pepsi, Diet Pepsi, 7 Up, Mirinda, Mountain Dew, Tropicana Slice and Nimbooz as well as packaged drinking water under the brand Aquafina. In addition, it has the franchise for the Ole brand of PepsiCo products in Sri Lanka.

The company counts AION Global, the special situations investment firm jointly run by Apollo Global and ICICI Venture, and Standard Chartered Private Equity as investors. 

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