Tata Consumer Products Ltd said on Monday it will acquire PepsiCo’s stake in NourishCo Beverages Ltd, an equal joint venture between the two companies, for Rs 29 crore ($3.8 million).
The decision to buy PepsiCo’s 50% stake in NourishCo is consistent with Tata Consumer’s focus on widening its portfolio in the food and beverages segment, the Indian company said in a statement.
"The liquid beverages category has exciting growth potential and this move will help us strengthen and widen our presence in it,” Sunil D’Souza, CEO at Tata Consumer, said.
Tata Consumer, in its previous avatar as Tata Tea Ltd, and PepsiCo had formed the joint venture in 2010. NourishCo sells non-carbonated beverages Himalayan mineral water, Tata Gluco Plus and Tata Water Plus.
Tata Consumer is said to have a consolidated revenue of Rs 10,000 crore and employs over 2,200 people in its branded business.
India's steel-to-autos conglomerate Tata Group had also last year demerged the consumer products business of Tata Chemicals into Tata Global Beverages to achieve broader exposure to the fast-moving consumer goods sector.
The demerged entity houses currently key brands such as Tata Salt, Tata Tea, Tata Sampann and Tetley under a single umbrella. Tata Chemicals, on the other hand, will focus on innovative science-based chemistry solutions and products.
Tata Consumer claims to be the second-largest player in branded tea in the world with over 330 million servings everyday across the globe. The company also has a joint venture with Starbucks called Tata Starbucks Ltd, to own and operate Starbucks cafés in India.
Since the inauguration of the flagship store in Mumbai in October 2012, this 50:50 JV has expanded to 10 cities, with many more Starbucks stores planned across the country.