Unilever Parts Ways with Tea Business in $5B Deal

Consumer products manufacturer Unilever has struck a deal to shed its global tea business, ekaterra, to CVC Capital Partners Fund VII for €4.5 billion (about $5 billion), a company release revealed Thursday. The transaction includes well-known tea brands like Lipton, PG Tips, and TAZO.

“The evolution of our portfolio into higher growth spaces is an important part of our growth strategy for Unilever. Our decision to sell ekaterra demonstrates further progress in delivering against our plans,” the firm’s chief executive officer, Alan Jope, said in a statement. “We are proud of the place that our Tea business has in our company’s history. We look forward to seeing ekaterra, with its strong brands and global footprint, prosper under CVC’s ownership. I would like to thank our Tea colleagues around the world for their passion and commitment to our Tea business and wish them well for the future.”

Unilever said the sale does not include its tea business in India, Nepal, and Indonesia, or its interests in Pepsi Lipton ready-to-drink tea joint ventures and its related distribution businesses.

The parties must receive several regulatory approvals and complete works council consultation processes for the transaction to proceed. CVC Capital Partners Fund VII and Unilever expect the sale to close in the second half of 2022.

Plans for the sale of the tea business were announced in July after the company completed a strategic review of the business. Unilever said lipping sales of traditional black tea contributed to the initiation of the review. A company official told the Financial Times that black tea sales have declined steadily over the last four years, especially in west Africa, India, and the Middle East.