Share price of Varun Beverages rose 4.7 percent intraday Monday as company board approved to acquire franchise rights from PepsiCo and to approve capital raising plan.
The company board of directors in their meeting held on Feb 18, approved to enter into a binding agreement with PepsiCo India Holdings to acquire franchise rights in South and West regions from PepsiCo for a national bottling, sales and distribution footprint in 7 states and 5 Union Territories, which is subject to receipt of necessary statutory approvals.
Upon completion of these acquisitions, company will be a franchise of PepsiCo beverages business across 27 states and 7 Union Territories of India.
The proposed acquisitions are in line with the company’s strategy to expand into contiguous territories and will help to acquire greater scale, operational productivity and efficiency leading to higher revenues and profitable growth, company said in release.
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Board also approved to convene meeting of the board of directors on February 26, 2019 (i.e. in addition to the meeting scheduled on February 20 for approval of annual audited financial results of the company) to consider raising of capital through qualified institutions placement (QIP).
At 12:12 hrs Varun Beverages was quoting at Rs 778.55, up Rs 14.05, or 1.84 percent on the BSE.
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First Published on Feb 18, 2019 12:19 pm