Varun Beverages gain 2% after signing multiple share purchase agreements

Shares of Varun Beverages rose nearly 2 per cent on Tuesday after it signed multiple share purchase agreements to acquire SBC Beverages Ghana and SBC Tanzania. 

 

Varun Beverages' stock rose as much as 1.92 per cent during the day to ₹550 per share. The stock, however, pared gains to trade 0.61 per cent lower at ₹536.5 apiece, compared to a 0.18 per cent decline in Nifty 50 as of 10:20 AM. 

 

Shares of the company extended gains to their fifth day and have risen over 30 per cent from their lows of ₹419 in early March. The stock has fallen 16 per cent this year, compared to a 0.78 per cent fall in the benchmark Nifty 50. Varun Beverages has a total market capitalisation of ₹1.81 trillion. 

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In an exchange filing on Monday, the company informed that it entered into a share purchase agreement with Ghana Bottling Company Limited to acquire a 100 per cent stake in SBC Beverages Ghana Limited. It also entered into an agreement with Tanzania Bottling Company SA to acquire a 100 per cent stake in SBC Tanzania Limited. These are subject to regulatory and other approvals, it said in the statement. 

 

Last month, the company extended the deadline for completion of the acquisition of Ghana-based SBC Beverages for a month to March 31. On November 13, 2024, PepsiCo's largest franchise bottler entered into a share purchase agreement for the purchase of 100 per cent shares of SBC Beverages Ghana at $15.06 million (₹127.1 crore). The company had estimated to complete the transaction by the end of February 2025.  ALSO READ | Rites up 3% on bagging order from Oil India; Infomerics reaffirms rating

 

Meanwhile, Varun Beverages set April 4 as the record date for the purpose of ascertaining the eligibility of equity shareholders for its final dividend of ₹0.50 per equity share. 

 

The Fast Moving Consumer Goods (FMCG) company posted a healthy set of results in the fourth quarter of year ended December 31, 2024 (Q4CY24). Its profit climbed 40.3 per cent year-on-year (Y-o-Y) to ₹185.1 crore in Q4CY24, from ₹131.9 crore in Q4CY23. The revenue (less excise duty) soared 38.3 per cent Y-o-Y to ₹3,688.8 crore Q4CY24 from ₹2,667.7 crore a year ago. 

At the operating level, earnings before interest, tax, depreciation, and amortisation (Ebitda) climbed 38.7 per cent Y-o-Y to ₹579 crore from ₹418.1 crore a year ago. Ebitda margin remained flat Y-o-Y at 15.7 per cent. 

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Varun Beverages Ltd part of the RJ Corp group, a diversified business conglomerate with interests in beverages,quick-service restaurants dairy and healthcare is the second largest franchisee in the world (outside US) of carbonated soft drinks ('CSDs') and non-carbonated beverages ('NCBs') sold under trademarks owned by PepsiCo.