PepsiCo India has divested its four plants in North India to its bottling partner Varun Beverages, a part of RJ Corp, as part of a franchise agreement.
“This transaction is aligned with PepsiCo’s long-term strategy to grow our business in India, which is an important strategic market,” PepsiCo India Chairman and CEO D Shivakumar said in a statement.
He further said: “We are expanding our partnership with a strategic partner who understands the local market and has continually demonstrated the ability to drive synergies and deliver strong market execution.”
The company did not share the financials of the transaction. As per the agreement, PepsiCo has franchised its beverage business in parts of Uttar Pradesh, Haryana, Chandigarh, Uttaranchal, Himachal Pradesh and Punjab.
Commenting on the development, RJ Corp Chairman Ravi Jaipuria said: “This transaction will enable VBl to integrate its operations across the north and east of the country and realise supply chain efficiencies, manufacturing economies of scale, greater efficiencies in inventory management, an optimized logistics network, improved customer service, and enhanced cost leverage.”
PepsiCo India said: “With this new transaction, our India bottling footprint will consist of two contiguous territories - North and East, completely franchised – and South and West, largely maintained as a company-owned bottling operation.”