Tata tea, tetley, eight o clock, himalayan, tata salt and tata sampann reach of 200 million households in india, they have an unparalleled. In 2001, after tata tea took over the giant tetley in a leveraged buyout, it was presented with problems. The largest tea manufacturing company in india marketing essay. This study is to identify the strategic competitive advantages, driversmotives, challenges and the outcome of tata tea ltd. Branded teas contribute 88% of the consolidated turnover of the group, with the remaining 12% coming from bulk tea, spices and investment activities. An important landmark in the indian corporate history was the acquisition of the iconic tetley brand by the tata global beveragesformerly known as tata tea in the year 2000. So in 2000, tata tea acquired tetley, which is an uk tea company that 3 times the size of tata tea, and was not owned by large consumergoods firms, at the price of 271 million pounds, which is the. For the last 18 years, harris tea was a part owner of the tetley harris food group with a focus on global sourcing, innovation, and manufacturing of beverage products for the foodservice industry. This case study revolves around tata tea limited, a seller of packet tea in india, which is considering acquiring tetley tea in the year 2000. This largest cross border acquisition by an indian company made it the worlds 2nd biggest tea company with the combined turnover worth inr2800 2900 cr leading to its aggressive growth and worldwide expansion.
Apr 07, 2021 harris tea company has announced the acquisition of tetley harris food group from tata consumer products company. Tata tea acquired tetley from the venture capital investors in february 2000. The deal to buy the worlds second largest producer of tea bags is worth. While tata tea is the second largest tea company in india after hindustan lever,it owns the single largest tea brand in the country, tata tea premium.
The b case highlights some of the integration steps undertaken by the newly appointed integration team. Tata tea, uk 27% value share of tetley, acquisition of leading brands across the globe, good earth in us 20. An important step for tata tea was the acquisition of the tetley group based in united kingdom in 2000. Tata tea acquired tetley in the first everleveraged buyout lbo. Revenue synergy the consolidated revenues of tata tea and tetley tea were slated to be higher, which was one of the motives to go for this acquisition as far as tata tea was concerned. The acquisition of tetley made tata tea the second biggest tea company in the world with the expected combined turnover worth rs. Tea remains at the core of tgb with 74% of the companys usd 1. An overview of tata tea limited an overview of tetley analysis of the merger the deal was a rare example of an indian company. Tata tea s strategy of pushing for aggressive growth and worldwide expansion. In 2000, tgb acquired uk tea maker tetley for usd 450 million, at the. Tetley is also one of britains favorite cups of tea.
The success story tata tea acquiring tetley merger implications. Harris tea acquires tetley harris food group cstore decisions. The coffee shops branded as starbucks coffee a tata. International research methods the analysis of tata tea ltd. It was only after the acquisition of tetley by the then tata tea, that the companys supply chains were finally consolidated with those of tata tea s. Tata tea limited ttl, is the second largest tea company in india. Tata tea reportedly outbid the american conglomerate sara lee in what was described as the largest. Merger tata tea tetley preimplications acquisition acquisition consoli. Understanding leveraged buyout case the buzz stand. Tata teas strategies for that global cup of tea the. It has a significant presence in over 35 countries. Tata tea is grappling with the decision of how to internationalise.
Tata motors resource acquisition and catchup in passenger cars. As a matter of fact, the company made a 100% acquisition of tetley tea of the uk in 2000. For the last 18 years, harris tea was a part owner of the tetley harris. This deal which was the biggest ever crossborder acquisition, was also the firstever successful leveraged continue reading. The company is thus contemplating internationalisation. Position in the value chain 305 mn gbp tata tea pre acquisition. The company beat rival bids from sara lee and nestle to buy tetley tata puts this success down to meticulous planning. Starting in 2006, the company began to restructure, the key element of which was divestment of direct ownership of plantations. Canadian novelis, the worlds leading producer of aluminum rolled products. Tata tea to merge tata tetley business standard news. Introduction in the summer of 2000, indian corporate fraternity witnessed path breaking achievement new chapter in indian corporate history tata tea acquired the uk heavyweight brand tetley for.
The acquisition of tetley made tata tea the second biggest tea company in the world. Since then, the brand has gone from strength to strength, with a brand presence in over 40 countries, with millions of cups of tea enjoyed every day. It can choose to build its own international brand or, take the opportunity of buying tetley. In late 1999, indias second largest tea company, tata tea, is faced with a highly competitive home market that is about to become more so as impending deregulation takes effect. Tea gardens to tetley, a brief history of indias tata tea. Company has moved up the value chain84% of turnover came. Should tata tea limited internationally market its own brand or just go ahead. The company has five major brands in the indian market catering to all major consumer segments tata tea, after the acquisition of tetley, has bacome the worlds second largest branded tea company. Tata global beverages tgb is a diversified beverage distribution and retail. Tetley is a beverage manufacturer founded in 1837 in yorkshire, england. That the company was headed for an aggressive acquisition strategy was evident in that tgb at the time was onethird the size of tetley. Krishna kumar knew that he had to make a decision soon.
Tata tea limited pdf amongst all that are listed in table1, the acquisition of tetley, uk was the most beneficial and also challenging for tata tea. Tata tea tata tea was a part of the tata group of companies one of the largest and most highly regarded familyowned conglomerates in india. In 2000, ttl had acquired tetley a major uk tea manufacturer. Doc tetley group merger with tata ram extreme academia. Tetley group uk in 2000, tata tea limited acquired the ukbased tetley group.
By february 2002, it was apparent that by all metrics, the acquisition of tetley was not going well. Tata tea, after the acquisition of tetley, has bacome the worlds. This will give you a clue as to whether tata tea tetley acquisition case study you should trust us or not. Leveraged buyout model can be understood easily with a renowned case.
Dec 07, 2011 the acquisition of tetley pitch forked tata tea into a position where it could rub shoulders with global behemoths like unilever and lawrie. Tata tetley group 1 free download as powerpoint presentation. Operations synergy tata tea had a large number of tea gardens, whereas tetley tea had expertise in buying tea from global auction market and sell. Harris tea company is proud to announce the acquisition of tetley harris food group from tata consumer products company. Analysts had expressed doubts as to whether the deal would. This led to most of tetley s tea leaves now originating from tata s plantations across india and sri lanka. Retailer food service retailer is the most widely used which took up about 62. The company has five major brands in the indian market catering to all major consumer segments. We raised the entire cost through debt from abroad, without denting tata tea or its profits in india. Kiran a05 abhay sakharkar a10 aditi lakhe a20 industry profile. In 2000, tgb acquired uk tea maker tetley for usd 450 million, at the time the largest acquisition ever by an indian company 2. For the last 18 years, harris tea was part owner of montvale, n.
Tata tea, tetley, eight o clock, himalayan, tata salt and tata sampann reach of 200 million households in india, they have an unparalleled ability to leverage the tata brand in consumer. Harris tea acquires tetley harris food group from tata consumer products. For the past 18 years, harris tea was a part owner of the tetley harris food group with a. With the acquisition of the tetley s brand in 2000, tata tea began a process of increasing integration into global markets. Jun 02, 2020 an example of this initiative can be seen from the way it has entered the pakistan market. The failure of tetley to make the required cashflow targets and the high debt burden required tata tea to make some changes. Apr 01, 2021 we are a focused consumer products company, home to iconic brands like tata tea, tetley and tata salt.
In 2012, the company ventured into the indian cafe market in a 5050 joint venture with starbucks coffee company. The companys businesses were in west asia and poland. Tata motors transformational resource acquisition path berlin. Tata tea is the biggestselling tea brand in india, tetley is the biggestselling tea brand in canada and the secondbiggestselling in united kingdom and united states. R k krishna kumar, chairman of tetley stated in 2002. Tata tea reportedly outbid the american conglomerate sara lee in what was described as the largest takeover of a foreign company by an indian one to date. Harris tea acquires tetley harris food group from tata. Tata tea acquires stake in russian beverages maker grand. Feb 28, 2000 the acquisition excludes the american coffee business of tetley, which was recently sold by the existing shareholders of tetley separately. The first being unilever, owner of brooke bond and lipton. Darbari seth, chairman of tata chemicals and tata tea, put it bluntly.
Harris tea company has announced the acquisition of tetley harris food group from tata consumer products company. It is the largest tea company in the united kingdom and canada, and the second largest in the united states by volume since 2000, tetley has been a wholly owned subsidiary of tata consumer products formerly tata global beverages, headquartered in kolkata, making it the second largest manufacturer of teas in the world. All in all, it is in an acquisition mood and this can be demonstrated from the way it is warming up to russia. Their entire range of teas are blended and packed at their eaglescliffe, teeside plant in the u.
Reading tata tea tetley acquisition case study what other clients say about us can tata tea tetley acquisition case study give you an idea how they rate our services and their experience with us. Challenges and synergies in tata tetley deal term paper. After the acquisition of tetley, the company moved australian operations into tata tetley and ramped up. Green tea black tea oolong tea dark tea others green tea is the most widely consumed which takes up about 57. The takeover made tata tea the second largest tea company in the world, after unilever owner of pg tips. Tetley, the 2nd largest tea brand globally, with a heritage of more than 180 years, joined the tata consumer products family in 2000. Tata tea and tetley 1 mergers and acquisitions leveraged buyout. It can choose to build its own international brand or, take the opportunity of buying tetley tea, the world. Tetley tea, inventor of the teabag and maker of the traditional english cuppa, is being bought by tata tea of india.
441 509 1109 1156 374 1085 893 739 109 460 1712 972 1725 816 1643 336 235 1585 1112 1305 1765 1662 1487 1357 1064 800 876 1143 808 1691 1052 1404 1750