KOLKATA: Tata Global BeveragesNSE -3.48 % (TGBL) is buying Dhunseri Tea & Industries’ branded packet tea business along with its brands ‘Lal Ghora’ and ‘Kala Ghora’ for a total consideration of Rs 101 crore. TGBL said in a stock exchange filing on Tuesday that the move is in line with its ambition to grow its branded tea business in India.
Two people familiar with the matter said that it’s an all-cash deal which does not include Dhunseri Tea’s smaller brands ‘Chhote Lal’ and ‘Dhunseri Gold’, since the two brands have no commercial value.
The proposed acquisition will be subject to due-diligence, signing of definitive binding agreements and applicable shareholder, statutory, regulatory and other third-party approvals.
Merchant banker ICICI Securities and law firm Khaitan & Co helped structure the deal. CK Dhanuka, the owner of Dhunseri Tea & Industries, told ET, “Both my brands are strong and can easily grow into a ?300-crore brand with TGBL’s marketing and distribution strength.”
According to one of the persons cited earlier, Dhanuka had entered into a “non-binding term sheet” with TGBL as he wanted to exit from the branded packet tea business, not having achieved his ambition of turning them into a Rs 300-crore brand. Kolkata-based Dhanuka has been in the branded packet tea business for 27 years and is a dominant player in Rajasthan. An industry expert said the acquisition of ‘Kala Ghora’ and ‘Lal Ghora’ brands will help TGBL expand its footprint in Rajasthan.