Private equity group agrees €4.5bn deal to acquire Unilever’s tea business
Unilever has entered into an agreement to sell its global tea business, ekaterra, to CVC Capital Partners Fund VIII for €4.5bn on a cash-free, debt-free basis.
The group announced it was considering disposing of the business in January 2020, as part of a strategic review revealed by chief executive, Alan Jope. It includes a factory in Trafford Park, Greater Manchester, which makes the PG Tips and Lipton brands.
ekaterra is the world’s leading tea business, with a portfolio of 34 brands including Lipton, PG tips, Pukka, T2 and TAZO. The business generated revenues of around €2bn in 2020.
Alan Jope said: “The evolution of our portfolio into higher growth spaces is an important part of our growth strategy for Unilever. Our decision to sell ekaterra demonstrates further progress in delivering against our plans.
“We are proud of the place that our tea business has in our company’s history. We look forward to seeing ekaterra, with its strong brands and global footprint, prosper under CVC’s ownership.”
He added: “I would like to thank our tea colleagues around the world for their passion and commitment to our tea business and wish them well for the future.”
Pev Hooper, a managing partner at CVC Capital Partners, said : “ekaterra is a great business, built on strong foundations of leading brands and a purpose-driven approach to its products, people and communities. ekaterra is well positioned in an attractive market to accelerate its future growth, and to lead the category’s sustainable development.
“We look forward to working with the team to realise ekaterra’s full potential.”
John Davison, CEO of ekaterra, said: “ekaterra is a strong business with positive momentum and has an exciting future ahead under the new ownership of CVC. We look forward to the next stage of our journey as the world’s leading tea business.”
Completion of the transaction is subject to completion of works council consultation processes and the receipt of certain regulatory approvals.
Completion is expected in the second half of 2022. The transaction perimeter excludes Unilever’s tea business in India, Nepal and Indonesia as well as Unilever’s interests in the Pepsi Lipton ready-to-drink tea joint ventures and associated distribution businesses.
CVC is a private equity and investment advisory firm with a network of 25 offices throughout Europe, Asia and the US, with approximately $125bn of assets under management.
Since its founding in 1981, CVC has secured commitments in excess of $165bn from some of the world’s leading institutional investors across its private equity and credit strategies.
Funds managed or advised by CVC are invested in more than 100 companies worldwide, which have combined annual sales of in excess of $100bn and employ more than 450,000 people.
