Tata Tea to acquire 30-per cent stake in Energy Brands of US for $677 million

Mumbai: Tata Tea Ltd, the world's second-largest branded tea firm, is buying a 30-per cent stake in US-based Energy Brands Inc for $677 million. The acquisition is being made through a buy-out of the stake held by TSG Consumer Partners in Glaceau, the maker of Vitaminwater. The Tata group will also provide additional growth capital for Glaceau.

Tata Tea said its stake in Energy Brands would help strengthen its presence in the US and expand its beverages business globally. The deal also ensures that Glaceau continues to meet the explosive demand for its Vitaminwater brand in health-conscious America.

The Tata group's investment in Glaceau strengthens its US presence and provides opportunities for global growth for Tata's beverages business. The transaction, which was approved by Tata Sons' and Tata Tea's boards of directors, is being made through Tata Tea GB Ltd., which includes Tetley Tea's operations worldwide.

"I want to thank all the people who have made Vitaminwater so popular and told their friends about it. Now, millions more across the country looking for something healthier to drink can finally go out and get their own bottle of Vitaminwater," said J. Darius Bikoff, Glaceau founder and CEO.

"For more than 100 years, The Tata group has built a global reputation on the fundamental premise that doing good can translate into doing good business. Glaceau exemplifies this philosophy in its Vitaminwater product which was created to give people the nutrients they need every day," said R.K. Krishna Kumar, vice chairman of Tata Tea and a director of Tata Sons.

The Mumbai-based Tata group had US revenues of more than $1.97 billion, and global revenues of $22 billion in 2005-6. The Tata group has had a US presence since 1945 and its growing North American beverage business, which includes Tetley Tea, Good Earth Teas and Eight O'Clock Coffee, is a key part of its global strategy.

Glaceau brands include Vitaminwater, which is nutrient-enhanced, Smartwater, which is electrolyte-enhanced, and Fruitwater, which is flavor-enhanced.

The deal is subject to customary closing conditions, including governmental notifications and approvals.

Rabobank International is the exclusive financial advisor for the transaction. Shearman & Sterling LLP is serving as transaction counsel to Tata and Debevoise & Plimpton LLP is serving as transaction counsel to Glaceau.