• Unilever has sold its global tea business, ekaterra, to private equity company CVC Capital Partners Fund VIII for $7 billion on a cash-free, debt-free basis.
    Unilever has sold its global tea business, ekaterra, to private equity company CVC Capital Partners Fund VIII for $7 billion on a cash-free, debt-free basis.
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Unilever CEO Alan Jope announced a strategic review of its global tea business as the company released its full-year 2019 results. Its tea brands include PG Tips, Lipton, Bushells and Australian business T2.

While its tea market saw price-led growth, the quarter had the slowest growth rate in a decade. Finance chief Graeme Pitkethly said the company would look at “all options” for the business.

While tea was performing well in emerging markets and in the premium category, there was subdued consumer demand for black tea in its developed markets as consumers shift towards herbal tea

Jope said: “We continued to focus on the growing segments of premium black tea, black tea in emerging markets and fruit and herbal variants, with our premium herbal brand Pukka performing well.”

Pitkethly said all parts of the tea business would be considered in the review. Black tea is a major part of Unilever’s tea business, selling in 60 countries and generating around US$3.3 billion in annual sales, he said. However, sales of traditional black tea, the largest segment of the category, have been in decline in developed markets for several years due to changing consumer preferences.

Options following the review could be a partial or full sale of the business, but Pitkethly did not offer a timeframe. The review is expected to be completed by the middle of the year.

It bought the Australian business, T2, in 2013 for $60 million.   

Other FY19 results in its F&B business included Hellmann’s returning to growth in the 2H in the US business and its vegan mayonnaise now on shelves in more than 20 countries.

The growing convenience food trend drove price-led growth in the savoury Knorr’s portfolio. It also launched into the plant-based food markets with its acquisition of The Vegetarian Butcher and Rebel Whopper burger with Burger King.

A “particularly good” European summer drove ice cream growth, but the trending better-for-you market supported growth in vegan Magnum and Ben & Jerry’s Moophoria varieties.

Overall, Unilever reported underlying sales growth of 2.9 per cent, led by its emerging market business (5.3 per cent growth) and home care division, which grew 6.1 per cent.

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