New Delhi: Unilever plc has agreed to sell its global tea business CVC Capital Partners for 4.5 billion euros ($5.1 billion), ending the process of reviewing and spinning off the split that took more than two years.
The business being sold, called Ekaterra, hosts a portfolio of 34 tea brands including Lipton, PG Tips, Pakka Herbs and Tazo and is expected to generate 2 billion euros in revenue in 2020.
However, Unilever will retain its India and Indonesia tea operations as well as its bottled tea joint venture with PepsiCo.
Ekaterra will be sold on a cash and debt-free basis to CVC’s Capital Fund VIII, which is expected to expire in the second half of 2022, Unilever said in a statement Thursday afternoon.
The Financial Times previously reported on the sale.
Unilever CEO Alan Jopp said, “The growth of our portfolio in high-growth locations is an important part of our growth strategy for Unilever. Our decision to sell Ekatera reflects further progress than we had planned.”
The sale gives Unilever respite from a business that has been straining earnings for several years as demand for black tea has waned and consumer tastes have changed.
Jope has been under some pressure to turn around Unilever as its stock has plummeted and it struggles to cope with the cost of high inflation, particularly in emerging markets, which are its biggest sources of revenue.
Joop plans to focus on high growth areas such as plant-based foods, nutrition and premium beauty to drive sales growth.
The company reported stronger-than-expected quarterly organic sales last month, but warned that inflationary pressures would only worsen in 2022.
Unilever shares were down marginally in afternoon trade.
The business being sold, called Ekaterra, hosts a portfolio of 34 tea brands including Lipton, PG Tips, Pakka Herbs and Tazo and is expected to generate 2 billion euros in revenue in 2020.
However, Unilever will retain its India and Indonesia tea operations as well as its bottled tea joint venture with PepsiCo.
Ekaterra will be sold on a cash and debt-free basis to CVC’s Capital Fund VIII, which is expected to expire in the second half of 2022, Unilever said in a statement Thursday afternoon.
The Financial Times previously reported on the sale.
Unilever CEO Alan Jopp said, “The growth of our portfolio in high-growth locations is an important part of our growth strategy for Unilever. Our decision to sell Ekatera reflects further progress than we had planned.”
The sale gives Unilever respite from a business that has been straining earnings for several years as demand for black tea has waned and consumer tastes have changed.
Jope has been under some pressure to turn around Unilever as its stock has plummeted and it struggles to cope with the cost of high inflation, particularly in emerging markets, which are its biggest sources of revenue.
Joop plans to focus on high growth areas such as plant-based foods, nutrition and premium beauty to drive sales growth.
The company reported stronger-than-expected quarterly organic sales last month, but warned that inflationary pressures would only worsen in 2022.
Unilever shares were down marginally in afternoon trade.
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