For more accurate and relevant business and economic news, subscribe to
The other side of everyday life newsletter. It’s completely free and we guarantee that you will learn something new every day.
It took a long time – almost two years – but Unilever finally unloaded its unwanted tea wallet on Thursday.
The consumer goods giant has agreed to serve a portfolio of tea brands to private equity giant CVC Capital for $ 5 billion.
Check the tea leaves
Unilever has attempted to sell off companies weighing on its portfolio – executives found themselves in hot water last year when revenue fell 3.5%, and stayed there as shares in the company have lost 13% of their value this year. His first solution to the problem was to sacrifice his line of beauty products, but no buyer has taken a bite out of the asking price of $ 1 billion.
The idea of selling the tea assets had been germinating for almost two years – sales have plummeted in recent decades as many consumers turned to alternatives such as kombucha, coffee and herbal tea – and, on Thursday , an agreement was finally reached:
- Unilever’s Ekaterra unit, which contains 34 brands including Lipton, PG Tips, Pukka Herbs and TAZO generating nearly $ 2.3 billion in revenue last year, will be sold to Luxembourg-based CVC.
- Unilever maintains its tea businesses in India and Indonesia, which grossed around $ 1.15 billion last year in markets where tea consumption is booming.
Unilever’s long-term goal is to focus on the fast-growing areas of plant-based foods and nutrition, both of which contributed to a 2.5% increase in its third-party sales. trimester. Several analysts have suggested that the company, which makes products as diverse as mayonnaise and soap, could be targeted by activist investors who want to break it down into more similar parts.
Social concerns: The tea industry has long been associated with the exploitation of workers and human rights abuses, about which many potential buyers have expressed concerns, according to the Financial Time. Unilever says it has programs in place to address these concerns, one of the main ones being the ongoing automation of tea picking at its largest plantation in Kenya.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.