Varun Beverages Acquires Devyani Food Industries Kenya's Dairy, Juice and Water Business for $32 Million to Deepen East Africa Footprint

Varun Beverages Ltd (VBL), PepsiCo's second-largest bottling partner globally, has announced that its wholly owned subsidiary VBL Industries (Kenya) Limited has entered into a Business Transfer Agreement to acquire the value-added dairy beverages, juices, and packaged drinking water business of Devyani Food Industries (Kenya) Limited - known for the Daima brand - for $32 million, or approximately ₹305 crore.

The acquisition, disclosed to the National Stock Exchange of India and BSE on July 6, 2026, includes all assets associated with the business as a going concern. The transaction is expected to be completed on or before August 1, 2026, subject to agreed conditions.

What VBL Is Acquiring

At the heart of the deal is a manufacturing facility located on a 52-acre land parcel in Nakuru, Kenya - positioned along a national highway with a built-up area of approximately 17,500 square metres. The plant, certified under the Food Safety System Certification (FSSC) 22000 and ISO 9001:2015, is equipped with a full suite of industrial utilities including an RO plant, boiler, effluent treatment plant, DG set, and air compressor.

The facility currently produces value-added dairy beverages, fruit juices, and packaged drinking water. VBL has also indicated that its Kenya unit is preparing to launch a range of carbonated soft drinks from the acquired site - directly leveraging the PepsiCo franchise to expand the product portfolio in the Kenyan market.

The deal has been valued at 0.9x EV/Revenue, suggesting a disciplined, asset-backed acquisition rather than a premium growth bet.

The Strategic Logic

The acquisition gives Varun Beverages an immediate manufacturing base and established distribution network in Kenya - assets that would otherwise take years and significantly more capital to build from scratch. By integrating DFIL Kenya's infrastructure into VBL Industries (Kenya), the company can deepen its Kenyan market penetration while also using Nakuru's highway location as a logistics hub for the broader East African region.

"The acquisition will enable VBL to deepen its penetration in Kenya and the broader East African region by leveraging DFIL Kenya's manufacturing infrastructure and distribution capabilities," the company said in its regulatory filing.

A Related-Party Transaction

The deal carries a related-party dimension. Devyani Food Industries (Kenya) is a promoter group company, making this a transaction between two entities connected to the same promoter group. Varun Beverages has stated that the transaction was undertaken on an arm's-length basis, meaning the terms were negotiated as if the parties were unrelated - a standard corporate governance disclosure for such deals.

Africa as a Growth Pillar

The Kenyan acquisition is the latest in a string of African deals that underscore VBL's commitment to the continent as a long-term growth market. The company recently approved the merger of its South African subsidiary Twizza into its step-down entity The Beverage Company (Bevco) to drive operational synergies, and has previously executed deals in Tanzania and Ghana.

Varun Beverages currently holds PepsiCo franchise rights across 26 Indian states and 6 union territories, as well as international territories spanning Nepal, Sri Lanka, Morocco, Zambia, Zimbabwe, South Africa, Lesotho, Eswatini, and the Democratic Republic of Congo, with distribution rights in Namibia, Botswana, Mozambique, and Madagascar.

On the financial front, VBL reported a 20% jump in consolidated net profit to ₹872 crore in Q1 CY26. Earlier this year, the company also announced a partnership with Japan's Asahi Group Holdings to bring the Calpis fermented dairy RTD brand to India - a move analysts at CLSA called strategically positive, maintaining a high-conviction outperform rating with a price target of ₹654 per share.