Varun Beverages Sees 2% Rise After Approving ₹1,119 Crore Twizza Deal

Varun Beverages Ltd (VBL) saw its shares rise by 2.2%, reaching an intraday high of Rs 480 on the Bombay Stock Exchange (BSE) recently. This increase follows the company’s Board of Directors approving the acquisition of Twizza Proprietary Limited, a South Africa-based beverage firm, in a cash transaction valued at Rs 1,118.70 crore (ZAR 2,095 million).

### Positive Market Response

Global brokerage Citi responded favorably to this announcement, maintaining a ‘Buy’ rating for Varun Beverages with a target price of Rs 675 per share. This suggests there could be a potential upside of 44% from the current trading price.

### Details of the Acquisition

Varun Beverages, a major franchisee of PepsiCo outside the United States, will acquire 100% ownership of Twizza through its fully owned South African subsidiary, The Beverages Company Proprietary Limited (Bevco). The acquisition is still pending regulatory approvals, including those from the Competition Commissions of South Africa, Botswana, and Eswatini.

Twizza, founded in 2003, is a significant player in the South African non-alcoholic beverage market, operating three manufacturing facilities located in Cape Town, Queenstown, and Middelburg. According to filings, Twizza sold around 71 million 8oz cases of soft drinks in the fiscal year ending June 2025, generating a turnover of ZAR 1,689 million (approximately Rs 9,019 crore).

### Strategic Implications of the Deal

The acquisition is set to strengthen Bevco’s market presence in South Africa. Twizza’s backward integration capabilities, including preform and closure lines at its facilities, align well with Varun Beverages’ operational strategy. Post-acquisition, Twizza will operate as a step-down subsidiary of VBL, broadening the company’s manufacturing footprint and reinforcing its position in Africa.

Citi noted that Twizza’s contributions will represent about 20% of VBL’s international business volumes and 6% of its consolidated figures for the same period, making this acquisition strategically important. The brokerage emphasized that Twizza’s integration will enhance operational efficiency and help scale Bevco’s capabilities in South Africa, in line with Varun Beverages’ growth objectives.

### Brokerage Outlook

Citi has reiterated a ‘Buy’ rating for Varun Beverages, maintaining the target price of Rs 675 per share, reflecting a potential 44% increase from the current market price. Additionally, the brokerage anticipates improvements in VBL’s performance in India, which will support the overall growth narrative.

The deal is expected to close by June 30, 2026. What do you think about the strategic direction Varun Beverages is taking with this acquisition?