Tata Global Beverages Ltd, the beverage business of the Tata Group, has decided to sell its Russian tea and coffee operations to Skodnya Grand for an undisclosed amount.
The development follows Tata Global Beverages selling its 90% stake in Zhejiang Tata Tea Extraction Co in China for about Rs 17.5 crore to its minority joint venture partner Zhejiang Tea Group recently.
The sale of its Russian business was necessitated due to macro-economic and other challenges in the region, Tata Global Beverages said in a stock market disclosure. The company, however, did not disclose the financial details.
The company's Russian business generated a turnover of Rs 266 crore and a loss after tax of Rs 29 crore for the financial year 2016-17, it said.
Post the transaction, the buyers will take over all the existing assets and operating liabilities, including employees, customer and supplier contracts, and will continue to manufacture and sell the existing brands and products.
The proposed transaction is subject to regulatory approvals and is expected to close within four months.
Tata Global Beverages had entered the Russian market in 2009 by acquiring a 51% stake in Russia's SuntyCo Holding Ltd in partnership with European Bank for Reconstruction & Development. Subsequently, in 2012, it bought the remaining 49% stake of SuntyCo, the owner of the ‘Grand’ branded tea and coffee business in Russia.
Tata Global Beverage, formerly Tata Tea, is one of the biggest global players in the tea and coffee segment.
It was also one of the first Indian companies to look at a large international business play in the segment with the acquisition of UK-based Tetley in 2000.