Unilever to sell tea business to CVC Capital

However, it will retain its business in India, Nepal and Indonesia, where tea brand Lipton is very popular.

CVC emerged as a preferred private equity bidder, beating Advent International, which was also in the fray.

“The evolution of our portfolio into higher growth spaces is an important part of our growth strategy. Our decision to sell Ekaterra (name of the tea business) demonstrates further progress in delivering against our plans,” Unilever Chief Executive Officer Alan Jope said.

In January 2020, Unilever said it was exploring a possible sale of the tea business to keep up with changing customer tastes and preferences in developed markets such as the US and Europe.

Unilever has come under pressure to revive growth, with its shares falling 13% in London this year, Bloomberg reported. To push growth, the company embarked on buying on-trend businesses such as healthy snacks maker Graze, plant-based foods brand Vegetarian Butcher and a string of upscale vitamins brands and skin care.

It also sold its margarine-and-spreads business to US private equity firm KKR & Co. for around $8 billion in 2018, The Wall Street Journal reported.

The London-based firm cast aside a plan to sell a beauty product portfolio for $1 billion earlier this year as it failed to attract buyers, according to a Bloomberg report.

Unilever’s tea business Ekaterra has 34 brands in its portfolio including Lipton, Pukka, T2, PG Tips and TAZO.

The business generated a revenue of about €2 billion last year, which is about 4 percent of Unilever’s overall sales.

European buyout giant CVC has holdings in Formula One auto racing series, Indonesian snack maker GarudaFood, Swiss watchmaker Breitling AG and Czech brewer StarBev, the company website revealed.

Meanwhile, RBC analyst James Edwardes Jones told The Wall Street Journal that he believed the price for the tea business was “slightly disappointing.”