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Varun Beverages to buy PepsiCo India’s existing franchised rights in two states

Published 14 August 2017

Varun Beverages has approved its intent to enter into a binding agreement to acquire PepsiCo India ’s previously franchised territories of the State of Odisha and parts of Madhya Pradesh along with three manufacturing units at Cuttack, Bargarh and Bhopal subject to the satisfactory completion of due diligence and final approval of PepsiCo.

After acquisition, VBL will be a franchisee for PepsiCo products across 18 States and 2 Union Territories.

These are highly under - penetrated regions and provide huge opportunity for increasing volumes and gaining market share.

The proposed acquisition is in line with the Company’s strategy to expand in to contiguous territories to garner better operating leverage and asset utilization through economies of scale.

Varun Beverages Chairman Ravi Jaipuria said: “We are happy to announce our intent to acquire PepsiCo India’s previously franchised rights of Odisha and parts of Madhya Pradesh . This is part of our strategy to consolidate our presence in contiguous territories and garner market share.

"These are highly under - penetrated markets which offer long term, sustainable growth opportunities . Further, the manufacturing facilit ies are strategically located close to target markets which will reduce time to market and enable optimization of freight and logistics costs, aiding margin expansion. ”