Varun Beverages ' wholly-owned subsidiary, VBL Industries (Kenya) Limited, has entered into an agreement to acquire the value-added dairy beverages, juices, and packaged drinking water business of Devyani Food Industries (Kenya) Limited for USD 32 million (~₹305 Cr). The deal, valued at 0.9x EV/Revenue, is aimed at deepening Varun Beverages' penetration in Kenya and the broader East African region, and is expected to be completed on or before August 1, 2026. The acquisition follows the company's disciplined overseas expansion strategy, which has previously included deals in Twizza, Tanzania, and Ghana.

The agreement involves the purchase of the business as a going concern, including all associated assets. Devyani Food Industries (Kenya) Limited is identified as a promoter group company, and the transaction has been conducted at arm's length. The acquisition will enable VBL Kenya to leverage the existing manufacturing infrastructure and distribution capabilities of the target company, with plans to subsequently launch carbonated soft drinks and energy drinks in the region.

Strategic Asset Acquisition

The acquisition includes a manufacturing facility situated on a strategically located land parcel of 52 acres with a built-up area of 17,500 sq. mtr. on a national highway in Nakuru, Kenya. The plant is equipped with utilities such as an RO plant, boiler, effluent treatment plant, DG set, and air compressor. The facility holds accreditations from reputed international agencies, including Food Safety System Certification 22000 and ISO 9001:2015, ensuring world-class quality and safety standards.

Transaction Overview

The key details of the acquisition are summarised below:

Analyst Views

Leading brokerages have responded positively to the acquisition, highlighting its strategic merit and long-term growth potential. JPMorgan has maintained its Overweight rating on Varun Beverages with a target price of ₹565, noting that the deal expands the company's overseas footprint by providing immediate manufacturing and distribution capabilities and supports carbonated and energy drink expansion. The brokerage flagged integration and scaling as key monitorables, while pointing out that overseas operations contribute 33% of revenue and 25% of EBITDA in CY25.

CLSA has maintained its High Conviction Outperform rating with a target price of ₹654, emphasising that the acquisition strengthens Varun Beverages' entry into Kenya and its broader expansion across Africa through existing manufacturing facilities. CLSA also highlighted the company's continued disciplined overseas acquisition strategy as a key positive.

Varun Beverages announced that its subsidiary, The Beverage Company Proprietary Limited (Bevco), has approved the merger of its step-down subsidiary, Twizza Proprietary Limited (Twizza). The merger aims to enable synergies of business operations and optimization of operational cost. The transaction is subject to compliance with applicable laws in South Africa.

The merger is classified as a related party transaction but will be conducted at arm's length. Since Twizza is a wholly-owned subsidiary of Bevco, there will be no cash consideration or issuance of new shares. The entire share capital of Twizza will stand cancelled upon the merger becoming effective. The shareholding pattern of Varun Beverages will remain unchanged as the merger involves two foreign subsidiaries.

Twizza is engaged in the manufacturing and distribution of own-branded non-alcoholic beverages in South Africa. Bevco manufactures and distributes licensed (PepsiCo Inc.) and own-branded non-alcoholic beverages in South Africa, Lesotho, and Eswatini. Bevco holds franchise rights from PepsiCo Inc. in these regions.

Financial Details

The disclosure provided the turnover figures for both entities for the financial year ended June 30, 2025.

The information was received by the company on July 2, 2026. Ravi Batra, Chief Risk Officer & Group Company Secretary, signed the disclosure.