Tata Tea Ltd has set its sights on Russian beverages market. After making big ticket acquisitions in the UK and the US previously, the Indian tea and beverages giant has acquired a 33.2% in Grand Business, a Russian beverages company.
Tata Tea has made the acquisition along with EBRD (European Bank for Reconstruction and Development). The latter is buying 17.8%. Both Tata Tea and EBRD will hold 51% stake in the Russian company, while the remaining 49% will be with the founding promoters led by Dr. Alexander E Borisov. The financial details of the transaction are undisclosed.
The acquisition is subject to the fulfilment of various conditions, including regulatory approvals, and is expected to be completed during the first half of 2009, Tata Tea informed stock exchanges. The company said that it wants to strengthen its presence in the Russian beverages market.
Meanwhile, there are reports which suggest that Tata tea is considering plans of merging Mt Everest Mineral Water with itself , and consolidating the Himalayan brand under the Tata fold.
Tata Tea’s earlier acquisitions
Tata Tea is the second largest tea company in India. It has a significant presence in over 35 countries. It has been one of the most acquisitive FMCG companies from India. In 2000, the company had acquired the UK tea producer Tetley for £271 million.
In another major deal in 2006, Tata Tea had acquired a 30% stake in Energy Brands, which sells energy drink Glaceau for $677 million. Tata Tea later sold this stake to Coca-Cola for $1.2 billion
In several smaller deals subsequently, Tata Tea's UK subsidiary recently acquired the assets of JEMCA, the leading tea company in the Czech Republic, for $12.5-million. The acquisition funded by The Tetley Group pushed the Tetley brand to the eastern European markets.
JEMCA is part of the Czech food processing company Alima Znac kova Potravina a.s., which exited the tea business to focus on its frozen foods business. JEMCA has a 26 per cent market share in Czech Republic.
In 2007, Tata Tea acquired 25% stake in Mount Everest Mineral Water, which sells Himalaya brand of mineral water. This has given the beverages maker a presence in drinking water segment.