Varun Beverages will acquire South African bottler Bevco, shares jumped 18 percent
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Varun Beverages Share Price:Varun Beverages Limited (VBL), PepsiCo’s largest franchise bottler, will acquire South Africa-based beverage company Bevco along with its wholly owned subsidiaries. The company said that this deal has been done at an enterprise value of Rs 1,320 crore and will help in expansion in the African market. Bevco holds the franchise rights for PepsiCo in South Africa, Lesotho and Eswatini. It also has distribution rights in Namibia and Botswana. VBL expects the deal to be completed before July 31, 2024. The company told the stock market that Bevco’s net revenue in FY 2023 was Rs 1,590 crore. The effect of this decision of the company is visible on the company’s shares. The stock has risen 26 percent in the last three days. After market opening this morning, the company’s shares jumped nearly 18 percent to Rs 1344.60.
What is the status of the share?
Shares of Varun Beverages Limited were trading at 1327.85 at 9.15 am today. Which rose by 18 percent during trading. Whereas, at 10.51 am the company’s stock jumped 11.19 percent i.e. Rs 131.15 to reach Rs 1,302.80. The good thing is that the company’s shares have given a return of 86.16 percent to investors in the last one year. According to Motilal Oswal, the acquisition of Bevco is EPS-enhancing for the company and represents an attractive valuation. This acquisition will improve the company’s presence in Africa. It has reiterated buy call on the stock while keeping the target price at Rs 1,285. In November, Varun Beverages announced a subsidiary in Mozambique, VBL Mozambique. Domestically, the company signed a memorandum of understanding (MoU) with the Jharkhand government on December 18 for a manufacturing plant in Patratu, which will have a total capex of around Rs 450 crore when fully operational.
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