PepsiCo plans to sell bottling operations in south and west to franchisees

Moneycontrol News

PepsiCo India is planning to sell its bottling operations in the west and south to franchisees, thereby exiting that part of its business across the country, two officials aware of the development told Economic Times.

The company had sold its bottling operations in the east and north to franchisee Ravi Jaipuria in 2014. It is not clear whether PepsiCo will divest its west and south bottling operations to multiple partners or consolidate further with Jaipuria, ET reported.

One of the officials mentioned above told the newspaper that the deal could be valued at close to Rs 3,000 crore. The pan-India divestment will likely be finalised in the first half of next year.

PepsiCo has 9 company-owned manufacturing units in the south and west. Once the deal goes through, PepsiCo will only own the brand name and will sell concentrate to franchisees and market its beverages.

The company declined to comment saying it does not comment on speculation or rumours.

“The move to franchise its bottling business nationally is in line with the New York-based company’s strategy of being asset light in the beverages business,” said one of the executives cited above.

In most countries around the world, PepsiCo has already divested its bottling operations to franchisees.