Tata Consumer Products Ltd (TCPL) on Thursday announced exit from its two US-based joint ventures by selling its stake to the JV partner Harris Tea Company LLC.
TCPL”s step-down subsidiaries in the USA have decided to divest their entire membership interest in Empirical Group LLC and Southern Tea LLC to the JV partner Harris Tea Company LLC, USA (Harris Tea), the company informed in a regulatory filing.
The exits from both the JVs are in-line with TCPL’s strategy to focus on the core branded business, it added.
“We hereby inform that the overseas step-down subsidiaries of TCPL in the USA have entered into an arrangement for the sale of its entire membership interest held in Empirical Group LLC (Empirical) and in Southern Tea, LLC (Southern Tea) to its Joint Venture Partner – Harris Tea Company LLC on March 31, 2021,” it said
However, the company did not share the amount, which it will receive from the divestment in both JVs.
Empirical is engaged in the sale of tea and coffee for food services and contract customers and Southern Tea is a manufacturing entity managed by Harris Tea Company LLC.
The exits from both the JVs are in-line with the TCPL”s strategy to focus on the core branded business, as the businesses of the above JVs do not have synergies with core branded business of TCPL.
“Other than the strategic advantage to TCPL from exiting these JVs, there are no other benefits to the promoter/promoter group of the Company from the said transaction,” it added.
Commenting on the development TCPL MD & CEO Sunil D’Souza said: “This divestment is another step towards consolidating and strengthening our presence in international markets and will enhance our focus on the branded tea and coffee businesses in the US market.”
TCPL (formerly known as Tata Global Beverages), which has operations in India and International markets, had reported Rs 9,637 crore as revenue from operations in FY 2019-20.
Its portfolio of products includes tea, coffee, water, salt, pulses, spices, ready to-cook offerings, breakfast cereals, snacks and mini-meals. PTI