Varun Beverages to Acquire Twizza for ₹1,119 Crore in Africa

Introduction

Varun Beverages Limited (VBL), one of the largest franchisees of PepsiCo outside the United States, has announced a significant move to bolster its presence in Africa. The company's board has approved the complete acquisition of South Africa-based Twizza Proprietary Limited. The deal, valued at an enterprise level of approximately ₹1,118.7 crore, will be executed through VBL's local subsidiary, The Beverages Company Proprietary Limited (Bevco). This strategic acquisition is aimed at deepening VBL's market penetration in South Africa, which stands as the continent's largest soft drinks market.

Details of the Acquisition

The transaction involves VBL acquiring a 100% stake in Twizza at an enterprise value of 2,095 million South African Rand (ZAR), equivalent to about ₹1,118.7 crore. According to a regulatory filing, the consideration will be paid entirely in cash. The acquisition is a strategic step following VBL's entry into the South African market in March 2024 with the purchase of The Beverage Company. The completion of the Twizza deal is subject to customary regulatory approvals, including clearances from the Competition Commissions of South Africa, Botswana, and Eswatini. The company has set an indicative timeline for the completion of the acquisition on or before June 30, 2026.

Profile of Twizza Proprietary Limited

Established in 2003, Twizza is a prominent player in the South African beverage industry, specializing in the manufacturing and distribution of its own brands of non-alcoholic beverages. The company operates a robust infrastructure with three manufacturing facilities strategically located in Cape Town, Queenstown, and Middelburg. These plants have a combined annual production capacity of 100 million cases. For the financial year ending June 30, 2025, Twizza reported a turnover of ZAR 1,689 million (approximately ₹901.9 crore). The company also possesses significant backward integration capabilities, including five preform lines and one closure line, which enhances its operational efficiency.

Strategic Rationale and Market Opportunity

The acquisition of Twizza is a calculated move to capitalize on the growth potential of the African beverage market. South Africa is the largest soft drinks market on the continent, with favorable demographics including a population of 70 million and a median age of 28. The market is projected to grow at a compound annual growth rate (CAGR) of 3.3% over the next five years. By acquiring Twizza, VBL gains access to its established manufacturing and distribution network, enabling deeper market penetration and the ability to introduce a wider portfolio of products. This move aligns with VBL's broader strategy of expanding its global footprint and diversifying its revenue streams beyond its core PepsiCo bottling operations.

Key Transaction Details

VBL's Expanding African Footprint

This acquisition is not an isolated event but part of a larger, deliberate expansion strategy across Africa. In March 2024, VBL acquired The Beverage Company, which gave it a foothold in South Africa, Lesotho, and Eswatini, along with distribution rights in several other African nations. Furthermore, in November 2024, the company entered into agreements to purchase PepsiCo's bottling businesses in Tanzania and Ghana. This pattern of acquisitions demonstrates VBL's commitment to becoming a dominant player in the African beverage sector, leveraging both its partnership with PepsiCo and opportunities with local brands like Twizza.

Financial and Market Impact

Upon completion, Twizza will become a step-down subsidiary of Varun Beverages. The integration of Twizza's operations is expected to create significant synergies, from manufacturing efficiencies to expanded distribution reach. For investors, this move signals VBL's aggressive growth ambitions and its ability to execute large-scale international acquisitions. The deal diversifies VBL's geographical risk and provides a new engine for growth. The company's revenue in 2024 stood at ₹20,007.7 crore, and this acquisition is poised to contribute positively to its top line in the coming years once fully integrated.

Conclusion

Varun Beverages' acquisition of Twizza marks a pivotal step in its international expansion journey. By securing a strong manufacturing and brand presence in South Africa, VBL is well-positioned to tap into the continent's growing consumer market. The transaction underscores the company's strategic vision to consolidate its position as a global beverage powerhouse. The focus now shifts to securing the necessary regulatory approvals to finalize the deal by the mid-2026 deadline, which will pave the way for the next phase of VBL's growth in Africa.