Growth strategies come in all forms, and Unilever’s most recent blueprint comes in the shape of a pivotal sale. Earlier this week, the company announced it has entered a definitive agreement to sell its global Tea business, ekaterra, to CVC Capital Partners Fund VIII for €4.5 billion ($5 billion USD) on a cash-free, debt-free basis.
“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,” said Alan Jope, Unilever Chief Executive Officer. “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. 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.”
ekaterra is a leading tea business with a robust portfolio of 34 brands, including Lipton, PG tips, Pukka, T2 and TAZO®. According to a press release, the business generated revenues of around €2 billion (2.2 billion USD) in 2020.
“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,” John Davison, Chief Executive Officer of ekaterra, said.
Completion of the transaction is subject to completion of works council consultation processes and the receipt of certain regulatory approvals, the release noted, and 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.
“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 realize ekaterra’s full potential,” commented Pev Hooper, a Managing Partner at CVC Capital Partners.
After inking this transformational deal, what growth will we witness from Unilever next? Stick with Deli Market News to find out.