Unilever signs $ 5 billion tea deal with CVC

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Nov. 18 (Reuters) – Unilever Plc (ULVR.L) has agreed to sell its global tea business to CVC Capital Partners for 4.5 billion euros ($ 5.1 billion), concluding a review and split of the division which lasted more than two years.

The currently divested company, called Ekaterra, hosts a portfolio of 34 tea brands including Lipton, PG Tips, Pukka Herbs and TAZO and generated a turnover of 2 billion euros in 2020.

Unilever will, however, retain its tea operations in India and Indonesia as well as its bottled tea joint venture with PepsiCo (PEP.O).

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Ekaterra will be sold to CVC’s Capital Fund VIII cash and debt free in a process expected to end in the second half of 2022, Unilever said in a statement Thursday afternoon.

The Financial Times earlier reported on sale.

“Shifting our portfolio to higher growth spaces is an important part of our growth strategy for Unilever. Our decision to sell ekaterra demonstrates further progress in achieving our plans, ”said Unilever CEO Alan Jope.

The sale relieves Unilever of a company that has been dragging its profits for several years as demand for black tea declined and consumer tastes changed. Read more

Jope has come under pressure to turn Unilever around as its stock languishes and struggles to compete amid high inflationary costs, especially in emerging markets, its biggest source of income.

Jope’s plan is to focus on the fastest growing areas such as premium plant-based foods, nutrition and beauty to drive sales growth.

The company reported stronger-than-expected quarterly organic sales last month, but warned inflationary pressures would only get worse in 2022. read more

Unilever shares were slightly lower in the late afternoon. ($ 1 = 0.8814 euros)

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Reporting by Pushkala Aripaka and Siddharth Cavale in Bangalore; Editing by Shinjini Ganguli and Keith Weir

Our standards: Thomson Reuters Trust Principles.

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