Varun Beverages' Unit Eyes ₹2,500 Crore Alcobrew Deal
Kiva Spirits, a subsidiary of Varun Beverages, is in advanced talks to acquire spirits maker Alcobrew for ₹2,000-2,500 crore, gaining a portfolio of liquor brands and manufacturing facilities
Varun Beverages' subsidiary Kiva Spirits is in advanced discussions to acquire Alcobrew Distilleries India Ltd for an enterprise value of ₹2,000 crore-2,500 crore. The proposed transaction would give Kiva a portfolio of liquor brands, manufacturing facilities, and a distribution network.
Kiva Spirits and Company Ltd, incorporated at the end of August, is looking to build its presence in the alcoholic beverages market through this acquisition. Alcobrew makes a range of whiskies, including Gamber Valley single malt, apart from vodka, gin, brandy, and rum.
The valuation of ₹2,000 crore-2,500 crore would be roughly 16.7-20.9 times Alcobrew's FY25 Ebitda of ₹119.7 crore, based on financial figures available in its IPO documents. Alcobrew's planned initial public offering comprises a fresh issue of shares of up to ₹258.25 crore and an offer for sale of up to 18 million shares by promoter Romesh Pandita.
## What it means The acquisition would mark a significant expansion of Varun Beverages' presence in the alcoholic beverages market. With the addition of Alcobrew's portfolio of liquor brands and manufacturing facilities, Kiva Spirits would gain a stronger foothold in the industry. The deal, if successful, would also provide an exit opportunity for Alcobrew's promoters, allowing them to crystallize the value they have created.
The proposed transaction is expected to be finalized soon, with the valuation being discussed between the two parties. The talks are at an advanced stage, although the structure and terms of the transaction have not been finalized. If the deal materializes, it could work well for both sides, offering Alcobrew's promoters a meaningful exit and providing Kiva Spirits with a significant presence in the alcoholic beverages market.
## Background Varun Beverages, a Pepsi-bottler, has been looking to expand its presence in the alcoholic beverages market. The incorporation of Kiva Spirits and Company Ltd at the end of August marked a significant step in this direction. With the proposed acquisition of Alcobrew, Varun Beverages is poised to make a major splash in the industry.
