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Varun Beverages on Friday said that it has entered into a binding agreement to acquire the franchise rights for PepsiCo India’s products from the SMV Group in Karnataka, Maharashtra and Madhya Pradesh. Varun Beverages is one of the largest franchisees of PepsiCo outside the US.
The company said the agreement is subject to completion of due diligence and other approvals, including an approval from PepsiCo. However, the company did not reveal the financials relating to the proposed deal.
“Upon completion of these acquisitions, the company will be a franchisee of PepsiCo products across 22 States and two Union Territories of India,” the company said in a statement. The deal includes 13 districts in Karnataka, 14 in Maharashtra and three districts in Madhya Pradesh. These are highly under-penetrated regions and provide a significant growth opportunities, the company added.
Ravi Jaipuria, Chairman, Varun Beverages Ltd, said: “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 facilities are strategically located close to target markets, which will reduce time to market, enable optimisation of freight and logistics costs, and aid in margin expansion.”
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