Tata Tea to acquire Russian distributor

Tata Tea Ltd. and the European Bank for Reconstruction and Development (EBRD) have decided to acquire a 51 percent controlling stake in the Russian branding, packaging and distribution company Grand.

Tata Tea will be acting through an as yet undisclosed overseas subsidiary for this transaction. The acquisition is expected to strengthen its presence in the Russian beverages market.

Established in 1994, Grand is active in the economy segment of the coffee and tea business in Russia, and is mainly focused on regions outside the big cities and areas like the Urals, Siberia and Southern Russia.

Post-acquisition, Tata Tea and EBRD will have effective shares of 33.2 percent and 17.8 percent respectively, and the remaining 49 percent will remain with the founding promoters led by Dr. Alexander E Borisov.

The acquisition is subject to the fulfilment of various conditions, including regulatory approvals, and is expected to be completed during the first half of 2009.