Tata Tea, EBRD to jointly acquire 51 per cent in Russia's Grand

26 March 2009

Tata Tea Ltd and the European Bank for Reconstruction and Development (EBRD) will jointly acquire a controlling stake in the Russian branding, packaging and distribution company `Grand', a well known player in Russia's coffee and tea sector.

The consortium led by Tata Tea, acting through an overseas subsidiary, intends initially to hold 51 per cent of the Grand business -- with Tata Tea and EBRD having an effective stake of 33.2 per cent and 17.8 per cent, respectively. The balance of 49 per cent will remain with the founding promoters, led by Russian investor Alexander E Borisov.

Set up in 1994, Grand today is a major Russian branding, packaging and distribution company in the economy segment of the coffee and tea business in Russia. It is mainly focuses on regions outside the big cities and areas like the Urals, Siberia and Southern Russia.

The investment by the EBRD and Tata Tea will be used to fund a programme which includes, among others, the modernisation of Grand's production facilities in order to increase quantity and quality of output. This will open the way for new market opportunities, EBRD said in a release.

Besides providing fresh capital, Tata Tea will also bring its considerable expertise and know-how to Grand.

Tata Tea, one of the largest producers of coffee and tea in the world, has no investments in the beverages sector in Russia so far, but sees strong growth potential on a market where coffee is becoming increasingly popular and tea is a national beverage, the release said.