Unilever to sell its tea business, ekaterra, to CVC Capital Partners

With the deal, the world's largest tea maker will sell off its business called ekaterra, which hosts a portfolio of 34 tea brands including Lipton, tips, Pukka, T2 and TAZO. The business generated revenues of around €2 billion in 2020.

The deal does not include Unilever’s Tea business in India, Nepal and Indonesia as well as Unilever’s interests in the Pepsi Lipton ready-to-drink Tea joint ventures and associated distribution businesses, the company said in a statement.

Ekaterra will be sold to CVC Capital Partners Fund VIII for €4.5 billion on a cash-free, debt-free basis.

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.

According to Reuters, Jope's plan is to focus on higher growth areas such as plant-based foods, nutrition and premium beauty to boost sales growth.

The sale would relieve Unilever of a business that witnessed lower earnings due to waning demand for black tea owing to changes in consumer tastes, it added.