Tata Tea sells its stake in Glaceau

Tata Tea has announced the sale of their 30% stake in the US-based vitamin water maker Glaceau to Coca-cola for $1.2 billion, making a profit of $523 million in the deal. Mr. R.K. Krishna Kumar, vice-chairman of Tata Tea and a director of Tata Sons, the investment arm of Tata Group, said that they would use the funds to make Tata Tetley debt free. The total debt of Tata Tetley is estimated at $600 million.

Tata Tea paid $677 million for the acquisition of the 30% stake in Glaceau which was held by TSG Consumer Partners in August, 2006. Mr. Krishna Kumar said that they were looking at launching a whole range of products and health drinks. in the future. He said that they had learnt a lot from their experiences at Glaceau in the ready-to-drink market space. They were now open to further acquisitions upto $100 million and more, most of them in US market. "which is most attractive". He however didi not rule out acquisitions in Europe. Tata Tea would like to be a significant and leading player in the ready-to-drink, enhanced tea segments ridding on the health platform.

Coca-cola is seeking to bolster its portfolio of non-carbonated beverages in the face of slowing soft drink sales in its home market said Reteurs in a report. The company will start offering Glaceau products, which include vitamin water, smart water and vitamin energy drinks.

Related Articles:-

1. Tata Tea harvests Rs 4,900 cr as Coke takes over of Glaceau - Financial Express - 26-05-2007

2. Coca-Cola to buy Glaceau for $4.1 billion - Reuters - 26-05-2007