FirstRand Offers Guidance on $160M Beverage Transaction

Rand Merchant Bank (RMB), the corporate and investment banking arm of FirstRand, a leading financial services organization co-founded by South African business magnate Laurie Dippenaar, advised on a historic $160 million transaction. India-listed Varun Beverages Limited (VBL) acquired 100% of Beverage Company Proprietary Limited (BevCo).

BevCo, a Southern African carbonated soft drink manufacturer, with a portfolio of popular brands including Jive, Coo-ee, and Reboost. It also bottles and distributes PepsiCo-branded drinks. VBL’s acquisition represents a significant step forward in cross-border investment between India and Africa, bolstering VBL’s presence in Africa and increasing its reach into the Southern African market.

The R3 billion ($160 million) transaction involved a number of partners, including The Rohatyn Group’s private equity fund and Nedbank Private Equity. RMB served as the sole financial counsel to BevCo and the selling shareholders. The agreement marks a key milestone in cross-border transactions, effectively overcoming the complexity of Indian and South African rules.

RMB offered complete consulting services to BevCo and its selling shareholders during the sale process to a PepsiCo subsidiary (VBL). These services comprised valuation studies, negotiation methods, and buyer identification, which ensured a smooth transaction.

RMB’s role went beyond the sale itself. The business also negotiated the refinancing of BevCo’s existing debt and secured additional financing for the transaction. Their experience managing currency conversions and ensuring efficient capital flow contributed to the transaction’s success.

The Indian market reacted positively to the news, with VBL’s share price rising more than 10% to an all-time high on the announcement day. “This transaction represents a substantial investment and a significant vote of confidence in South Africa by a major global player in the beverage sector,” said Gareth Armstrong, Corporate Finance Executive at RMB.

Laurie Dippenaar co-founded FirstRand, Africa’s top financial services firm by market value, in 1977. The group provides a diverse range of financial products and services to both individual and corporate clients across the continent. Dippenaar currently has a 1.76 percent interest in FirstRand, or 98,726,988 shares.

RMB, a renowned corporate and investment bank in South Africa with a well-established network throughout Africa, is part of the FirstRand Group. RMB provides a complete range of financial solutions, including advising, lending, and trading services.

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