South African tycoon Laurie Dippenaar’s FirstRand advises on $160-million beverage deal

Rand Merchant Bank (RMB), the corporate and investment banking arm of FirstRand, a leading financial services group co-founded by South African tycoon Laurie Dippenaar, advised on a groundbreaking $160-million deal. The transaction saw India-listed Varun Beverages Limited (VBL) acquire 100 percent of Beverage Company Proprietary Limited (BevCo).

BevCo, a Southern African producer of carbonated soft drinks, boasts a portfolio of popular brands like Jive, Coo-ee, and Reboost. It also bottles and distributes PepsiCo-branded beverages. The acquisition by VBL marks a significant development in cross-border investment between India and Africa, strengthening VBL’s footprint in Africa and expanding its reach into the Southern African market.

The R3 billion ($160 million) transaction involved various stakeholders, including a private equity fund managed by The Rohatyn Group and Nedbank Private Equity. RMB acted as the sole financial advisor to BevCo and the selling shareholders. The deal signifies a significant milestone in cross-border transactions, successfully navigating the complexities of Indian and South African regulations.

RMB advises BevCo on sale to PepsiCo subsidiary

RMB provided comprehensive advisory services to BevCo and its selling shareholders throughout the sale process to a subsidiary of PepsiCo (VBL). These services included valuation analysis, negotiation strategies, and buyer identification, ensuring a seamless transaction.

RMB’s role extended beyond the sale itself. The firm also facilitated the refinancing of BevCo’s existing debt and arranged additional financing to support the acquisition. Their expertise in managing currency conversions and ensuring efficient fund flow further contributed to the successful completion of the deal.

The Indian market reacted favorably to the news, with VBL’s share price surging more than 10 percent 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.

About FirstRand and RMB

FirstRand, the leading financial services group in Africa by market capitalization, was co-founded by Laurie Dippenaar in 1977. The group offers a wide range of financial products and services to individual and corporate clients across the continent. Dippenaar presently holds a 1.76-percent stake in FirstRand, representing 98,726,988 shares.

RMB, a leading corporate and investment bank in South Africa with a well-established network across Africa, operates under the umbrella of FirstRand. RMB offers a comprehensive suite of financial solutions, including advisory, financing, and trading services.