Varun Beverages Proposes Full Takeover Of Twizza In South Africa To Boost Growth

Varun Beverages Limited has proposed a complete takeover of Twizza Proprietary Limited, a South African beverage manufacturer, as part of its strategic expansion into Africa's largest soft drinks market. The company has released a comprehensive board presentation detailing the ₹11,187 crore acquisition through its subsidiary The Beverages Company Proprietary Limited (Bevco).

Strategic Takeover Details

The proposed full takeover involves acquiring 100% stake in Twizza Proprietary Limited, positioning Varun Beverages to capitalize on significant growth opportunities in the African beverage market. The transaction represents a major step in the company's international expansion strategy.

Transaction Parameter	Details
Enterprise Value	ZAR 2,095 million (₹11,187 million)
Exchange Rate	1 ZAR = ₹5.34
Target Revenue	ZAR 1,689 million (₹9,019 million)
Sales Volume	71 million 8oz cases
Production Capacity	100 million 8oz cases annually

South African Market Opportunity

South Africa represents the largest soft drinks market in Africa with favorable demographic trends supporting the takeover rationale. The market demonstrates strong growth potential with a 5-year compound annual growth rate of 3.30% in industry volume, projected to reach 1,468 million 8oz cases by 2029 from 1,250 million cases in 2024.

Market Metrics	Current Status
Population	70 million
Median Age	28 years
Urbanization Rate	70.00%
Per Capita CSD Consumption	65 servings (8oz)
Market Growth (5yr CAGR)	3.30%

Twizza's Manufacturing Infrastructure

The takeover target, Twizza, established in 2003, operates robust manufacturing facilities across South Africa with three strategically located plants in Cape Town, Queenstown, and Middelburg. The company maintains comprehensive backward integration capabilities across all production facilities.

Infrastructure Details	Specifications
Manufacturing Lines	6 beverage lines (5 PET, 1 CAN)
Preform Lines	5 lines
Closure Lines	1 line
Market Presence	South Africa, Lesotho, Eswatini, Botswana, Namibia
Product Range	Carbonated soft drinks, energy drinks, functional drinks, mixers

Growth Strategy and Market Position

The proposed takeover aligns with Varun Beverages' strategy to strengthen its position in markets where B-brands hold significant market share of slightly under 50% by volume. This presents substantial opportunities for product portfolio innovation and expansion into newer categories like energy drinks and functional beverages.

Regulatory Approvals and Timeline

The takeover proposal remains subject to regulatory approvals from competition commissions of South Africa, Botswana, and Eswatini. Upon completion, Twizza will become a step-down subsidiary of Varun Beverages Limited, providing access to established distribution networks across multiple African markets. The transaction is expected to be completed on or before June 30, 2026, subject to obtaining necessary regulatory clearances.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
-2.38%	-0.56%	+4.09%	+6.73%	-19.43%	+455.62%

Varun Beverages Limited , a key player in the Indian beverage industry, recently saw its shareholders overwhelmingly approve a special resolution to alter the Object Clause of the company's Memorandum of Association. The decision, made through a postal ballot, garnered 99.95% votes in favor, demonstrating strong shareholder support for the company's strategic direction.

Shareholder Approval Details

The remote e-voting process, which concluded on November 29, saw participation from 3,635 shareholders, representing a significant 89.24% of the total paid-up equity share capital of Rs. 676.39 crore.

Financial Performance Overview

While the company has secured shareholder approval for its Object Clause alteration, a look at its recent financial performance reveals a mixed picture:

Revenue and Profitability

Metric (in Rs. crore)	Q3	Q3 Previous Year	YoY Change
Revenue	3,213.70	3,187.00	+0.84%
Net Profit	577.40	492.30	+17.29%
EBITDA	936.50	901.10	+3.93%

Despite a marginal increase in revenue, Varun Beverages has shown notable improvement in profitability, with a 17.29% year-on-year increase in net profit.

Operational Efficiency

The company's operational performance shows some areas of concern:

Operating Profit Margin (OPM): Decreased slightly from 25.95% to 25.68% year-on-year.
Expenses: Remained relatively stable at Rs. 2,277.20 crore compared to Rs. 2,285.90 crore in the previous year.

Year-to-Date Performance

For the first nine months, Varun Beverages has shown resilience:

Metric (in Rs. crore)	YTD	YTD Previous Year	YoY Change
Revenue	17,481.00	20,128.90	-13.15%
Net Profit	2,875.80	2,634.30	+9.17%
EBITDA	4,406.70	4,832.30	-8.81%

While revenue has decreased, the company has managed to improve its net profit, indicating effective cost management and operational efficiencies.

Looking Ahead

The approval of the Object Clause alteration by shareholders may signal upcoming changes in Varun Beverages' business strategy or operations. As the company navigates through a challenging market environment, evidenced by the mixed financial results, this move could potentially open new avenues for growth and diversification.

Investors and market watchers will be keen to see how this strategic decision translates into business performance in the coming quarters, especially given the company's ability to improve profitability despite revenue pressures.