Varun Beverages is all set to acquire PepsiCo’s bottling, sales and distribution operations in South and West India for its carbonated drinks business. The announcement of the deal is likely to happen within this week itself, as stated by the top official who is aware of the developments.
Varun Beverages is already the franchise partner for PepsiCo’s bottling operations in the North and East and it contributes to over 51% of its India sales volume.
The official said in a statement, “The details of the deal have been finalised; senior managers are going to key cities to meet employees and brief them about the change in franchising. A few regulatory approvals are pending and the announcement to employees about the franchising is expected very shortly.”
It was already in the reports that PepsiCo and VBL are in advanced talks for this deal.
This transaction will also include largescale transfers of employees and assets. The official also added, “Close to 200 employees across functions and levels have quit over the past 12-15 months, the company hasn’t been able to attract much top-tier talent and carbonated soft drinks as a category has lost resilience.”
The deal which is going to take place between PepsiCo and Varun Beverages is worth Rs 2,400 to Rs 2,700 crore. This is much more than what VBL has paid to PepsiCo for buying bottling operations in the North and East in 2014. PepsiCo will continue to own the brand name and sell concentrates to franchisees, while sales and distribution will be operated by the franchisees.