Consumer goods giant Unilever has agreed to sell its tea business – which includes PG Tips, Brooke Bond and Lipton – in a €4.5bn (£3.8bn) deal.
The business, which with 34 brands and annual revenues of €2bn (£1.7bn) is the world’s biggest tea maker, is being acquired by private equity firm CVC Partners.
It comes almost two years after Unilever – whose other brands include Marmite, Ben & Jerry’s and Dove soap, began a strategic review of the tea division because of sluggish sales in the category globally.
Sky News revealed in September that CVC was among the bidders that had been shortlisted to swallow up the business.
Unilever said at the time it launched the review that sales of traditional black tea, the largest segment within its tea business, had been in decline in developed markets for several years “due to changing consumer preferences”.
The tea business, known as ekaterra, is based in Rotterdam and employs around 20,000 people worldwide.
It has 11 production factories in four continents and tea estates in three countries.
Brands such as Lipton and Brooke Bond date back to the nineteenth century.
PG Tips was launched by Brooke Bond in the 1930s and was part of the business acquired by Unilever when it bought Brooke in 1984.
The sale comes after Unilever sold its spreads business – including brands such as Flora and I Can’t Believe It’s Not Butter – in 2018.
Unilever chief executive Alan Jope said: “The evolution of our portfolio into higher growth spaces is an important part of our growth strategy for Unilever.
“Our decision to sell ekaterra demonstrates further progress in delivering against our plans.
“We are proud of the place that our tea business has in our company’s history.
“We look forward to seeing ekaterra, with its strong brands and global footprint, prosper under CVC’s ownership.”
The deal is subject to regulatory approval and is expected to complete in the second half of next year.
Unilever will retain its India and Indonesia tea operations as well as its bottled tea joint venture with PepsiCo.