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Tata Tea expanding in U.S.
By agencies
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Wednesday, 09 August 2006, 19:30 IST
KOLKATA: Tata Tea is on an acquisition spree. Ratan Tata, chairman of Tata Sons said that after taking over Good Earth and Eight OClock Coffee, the company was looking for acquisitions in the U.S. and is currently working on a couple of proposals. He also stated that Tata Sons was looking to increase its stake holding in Tata Tea in the coming years. The proposed acquisition in the U.S. is focused to being bigger than the Tetley deal in U.K. The company plans to make the U.S. market the centrifugal point and cater to the European, Russian and Chinese markets through export.
R.K. Krishna Kumar, vice chairman of Tata Tea said that the company was keen on exploiting the beverage business market in the U.S. and hence the acquisition plans. Talking about the organic and inorganic modes of growth he said, There would be no acquisition in black tea segment. Instead we are eyeing the specialty tea segment.
Eyeing the beverages business using the tea market, Kumar said, The next generation business will be into teabased cosmetics, and hence the company is looking to increase its market share in the global beverages market. The Tata Tea Group currently holds nearly 45 percent of the global beverages market with a turnover of $681 million. It has set a target of touching $1.6 billion over the next three years.
Tata Sons plans to increase its holding in all the companies of the group and as a part of the process the company looks to enhance its holding in Tata Tea from 28 percent presently to 50 percent. Kumar, however, said that the move was not fuelled by any fear of a hostile takeover.
Tata Sons had increased their stake in Tata Steel in July this year by issuing preferential shares and warrants to promoters. This would help them raise their stake in the company to 34 percent form 27 percent in a year for a total consideration of $636 million according to market conditions.