India-based Varun Beverages, a bottler for PepsiCo, has announced the acquisition of DFIL Kenya, a company located in Kenya, as part of its expansion strategy in Africa.
In a disclosure to the stock exchange, Varun Beverages outlined that this transaction involves Devyani Food Industries (Kenya) Limited’s “value-added dairy beverages, juices, and packaged drinking water segment as a going concern.”
Additionally, the acquisition includes a manufacturing plant strategically situated along a national highway in Nakuru, located in southwest Kenya.
Varun Beverages has committed to paying Rs3.05 billion (approximately $32 million) for DFIL Kenya, identified as “a promoter group company.” The publication, Just Food, has reached out to the company for clarification regarding the connection between the two entities. According to the filing, the agreement has been executed on an “arm’s length basis.”
The company stated that this purchase is expected to “deepen its penetration” within Kenya and the larger East African market. It is also anticipated to bolster Varun’s plans to introduce a line of carbonated soft drinks in Kenya.
This acquisition comes in the wake of several similar deals by Varun Beverages across the African continent.
In March, the company finalized an agreement to acquire South Africa’s Crickley Dairy from Clark Holdings, a producer of dairy items and soft drinks.
Moreover, Varun Beverages took ownership of Twizza, a South African soft-drink manufacturer, last December.
Varun Beverages produces, distributes, and sells a range of PepsiCo beverages, encompassing both carbonated and non-carbonated drinks, including bottled water.
In May, the company secured a ten-year extension for its exclusive bottling and trademark license agreement with PepsiCo in India. This revised contract extends the license period to April 30, 2049, from the previous end date in 2039. The updated agreement also eliminated a restrictive clause that had previously prevented Varun Beverages from engaging in non-PepsiCo ventures.
