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Tata Global Beverages is in talks to sell a 20 per cent stake in its international operations to a strategic investor.
The company had been approached by a number of strategic players and “we are carefully analysing what would be a good fit,” Mr R.K. Krishna Kumar, Vice-Chairman, told the Financial Times in an interview.
“To achieve the ambitious growth plans of Tata Global Beverages, we are always evaluating options for the best way to invest in innovation, the growth of our brands and acquisitions,” the company said in a statement on Tuesday, adding that no specific proposals had yet been placed before the board.
The company has already created a couple of joint ventures, including with PepsiCo, for a non-carbonated drinks tie-up called NourishCo Beverages announced in April 2010. Last year, unconfirmed reports in the British and Indian media suggested that Tata Global Beverages was mulling the sale of a minority stake to private equity firms, with Blackstone and Advent International among the names mentioned.
Mr Krishna Kumar said the company would consider financial sponsors though the partner would have “to make a contribution to what we set out to do”.
On May 24, the company warned of intense cost pressure and a challenging trading environment as it reported a sharp drop in annual profits for the year ending in March. At the time, the company said that the company's Chief Executive, Mr Peter Unsworth, who has headed the company since 2009, would be stepping down at the end of June for personal reasons.
Our Research Bureau adds: Higher prices of commodity inputs and brand building expenses prompted a 22 per cent drop in the company's consolidated profits before exceptional items and taxes for 2010-11 compared with 2009-10.
The consolidated numbers include the company's overseas operations comprising the Tetley Group UK, Eight O' Clock Coffee USA, Joekels Tea and Polish tea brand Vitax.
The company recently forged a 50:50 joint venture with PepsiCo Holdings to promote non-carbonated ready-to-drink beverages and bought 31 per cent stake in a US company which makes Activate- a performance beverage.
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