Mumbai: Varun Beverages Limited’s proposed acquisition of South African dairy processor Crickley Dairy Proprietary Limited has moved into arbitration after the transaction’s contractual completion deadline expired without the required conditions being fulfilled.
The dispute was formally referred to the Arbitration Foundation of Southern Africa by The Beverage Company Proprietary Limited (Bevco), Varun Beverages’ South African operating subsidiary. According to the company’s regulatory disclosures, the share purchase agreement lapsed after the conditions precedent were not satisfied by the agreed September 30, 2026 long-stop date.
The arbitration involves Crickley Dairy and its parent company Clark Holdings Proprietary Limited.
₹131.5-Crore Dairy Acquisition
Varun Beverages and Clark Holdings had entered into the proposed transaction in March 2026, with Crickley Dairy assigned an enterprise value of approximately 238 million South African rand, equivalent to about US$14.3 million or ₹131.5 crore based on the reported transaction values.
Under the proposed agreement, Bevco was to acquire 100% of Crickley Dairy’s issued equity from Clark Holdings.
The acquisition was intended to expand Varun Beverages’ presence in the dairy segment, particularly in value-added liquid dairy products, flavoured milk and dairy-juice blended beverages, while leveraging the company’s established beverage distribution infrastructure in southern Africa.
One of the conditions required for completion was regulatory clearance from the South African Competition Commission.
Arbitration Follows Uncompleted Conditions
With the contractual conditions not completed before the September 30 deadline, the agreement’s long-stop provisions were triggered and Bevco referred the matter to arbitration.
The arbitration process is expected to determine the commercial issues arising from the termination of the transaction, including any obligations or claims between the parties.
The development also puts the proposed expansion of Varun Beverages into South Africa’s organised dairy-processing market on hold.
Crickley Dairy’s Regional Processing Base
Founded in 1984 by dairy entrepreneur Ken Clark, Crickley Dairy is based in Queenstown in South Africa’s Eastern Cape province.
The company processes farmgate milk into products including pasteurised liquid milk, cream, cultured buttermilk and other fermented dairy products. It supplies retail and wholesale markets and has a presence with major supermarket chains including Shoprite, Pick n Pay and Spar.
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The proposed acquisition would have given Varun Beverages access to an established dairy-processing operation, farmer relationships and associated cold-chain and distribution infrastructure in the Eastern Cape.
Varun Beverages’ African Expansion
The stalled dairy transaction comes as Varun Beverages continues to expand its beverage operations across Africa.
The company entered the southern African market through its acquisition of Bevco in 2023, gaining bottling and distribution operations for PepsiCo products across South Africa, Lesotho, Eswatini, Namibia and Botswana.
In December 2025, Varun Beverages also agreed to acquire South African carbonated soft-drink producer Twizza for approximately 2.095 billion rand, further expanding its manufacturing footprint in the region.
The Crickley Dairy transaction represented a separate diversification effort into dairy and adjacent beverage categories.
Cross-Border Dairy M&A Faces Regulatory and Execution Risks
The dispute highlights the additional regulatory and contractual requirements involved in cross-border acquisitions in the dairy sector, where businesses must manage competition approvals alongside operational, supply-chain and food-processing considerations.
For Varun Beverages, the arbitration brings the Crickley Dairy transaction to a legal and commercial resolution process while leaving its broader African beverage expansion strategy separate from the proposed dairy acquisition.
The final outcome of the arbitration will determine whether either party has further financial or contractual obligations arising from the lapsed transaction.
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