Kolkata-based Goodricke Group Ltd has entered into an agreement to acquire Godfrey Phillips India Ltd's packaged tea business for Rs 20 crore ($3 million), the two companies said in separate stock-exchange disclosures.
The sale is in line with the company’s decision to exit the packaged tea business, which contributed less than 3% of its gross sales, Godfrey Phillips said. In FY17, the company's domestic packaged and bulk tea business clocked a turnover of Rs 105 crore, according to its annual report.
The packaged tea brands sold by Godfrey Phillips include Tea City, SC Gold, Symphony, Samovar, SC Premium, Super Cup, Rangoli and Utsav.
Mumbai-based Godfrey Phillips is in the business of manufacturing cigarettes and chewing products, and in trading of tobacco products, tea and other retail products.
Incorporated in 1977, Goodricke Group is engaged in cultivation and production of tea. The company operates 17 tea gardens in West Bengal and Assam.
The branded tea business was the single-largest contributor to the company's profits in FY17, its annual report shows. Total income in FY17 stood at Rs 694.81 crore while net profit was Rs 33.13 crore.
The packaged tea brands of Goodricke include Castleton, Barnesbeg, Thurbo, Khaass, among others.
Earlier this year, battery maker Eveready Industries India Ltd, the largest maker of dry cell batteries in India, said it may consider a demerger of the packaged tea business into a wholly-owned subsidiary, or may look for a strategic partner.
In August, Tata Global Beverages Ltd, the beverage business of the Tata Group, decided to sell its Russian tea and coffee operations to Skodnya Grand for an undisclosed amount.