Varun Beverages Releases Board Presentation on ₹11,187 Crore Twizza Acquisition

Varun Beverages Limited has released a comprehensive board presentation detailing its strategic acquisition of Twizza Proprietary Limited, following the earlier board approval for the ₹11,187 crore transaction. The presentation provides deeper insights into the South African beverage market opportunity and the rationale behind this significant international expansion.

Transaction Overview and Market Context

The acquisition involves a 100% stake in Twizza Proprietary Limited, a South African beverage manufacturer, through Varun Beverages' subsidiary The Beverages Company Proprietary Limited (Bevco). The deal positions the company to capitalize on Africa's largest soft drinks market, which shows promising growth prospects.

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

According to the board presentation, South Africa represents the largest soft drinks market in Africa with favorable demographic trends. The market demonstrates 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

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

Production Capabilities

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

Strategic Rationale and Regulatory Process

The presentation highlights that the beverage industry in South Africa is dominated by B-brands with a market share slightly under 50% by volume. This presents significant opportunities for product portfolio innovation and expansion into newer categories like energy drinks.

The transaction remains subject to regulatory approvals from competition commissions of South Africa, Botswana, and Eswatini. The company has indicated that the South African Rand has appreciated by approximately 20% against the Indian Rupee since Varun Beverages' entry into South Africa in March 2024.

Financial and Operational Impact

Upon completion, Twizza will become a step-down subsidiary of Varun Beverages Limited, providing access to established distribution networks across multiple African markets. The acquisition excludes contract manufacturing volumes of 8 million cases, indicating additional revenue potential beyond the reported figures.

The deal represents a non-related party transaction, with no promoter or group company interest in the target entity. 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
-0.89%	-2.20%	+3.27%	+4.62%	-25.25%	+481.73%

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.