UK food manufacturer Premier Foods has announced that it has agreed to sell its tea business to Apeejay International Tea, a subsidiary of India’s Apeejay Surrendra Group, for £80m (US$95.9m).
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The consideration will be paid in cash and the transaction is expected to complete shortly. Premier said it will use the proceeds to reduce net debt.
The business being sold includes the Typhoo, London Fruit & Herb, Lift and other associated brands, own label contracts and Premier’s tea blending and packing facility at Moreton, Wirral, which employs 249 people. In the year to 31 December 2004 the tea business had net sales of £70.2m and operating profit of £11.2m after estimated attributable administrative overheads.
Premier and Apeejay have entered into agreements whereby Premier will provide services to Apeejay following completion, including transitional commercial and administrative support, logistics and the manufacture of Lift and Typhoo QT instant teas.
“Typhoo is a great brand but after a thorough review we believe it will benefit from the focus and investment a vertically integrated tea business like Apeejay can bring. Our strategy is to drive growth through the active management of our brand portfolio focusing on those brands with leading market positions,” said Robert Schofield, chief executive of Premier.
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By GlobalDataAs a result of the sale, Premier’s remaining beverages business, including the Cadbury manufacturing licence, will be incorporated into the spreads and desserts product group.
Launched in 1903 by Birmingham grocer John Summer, Typhoo now produces Typhoo Fruit & Herb, Typhoo Green Tea, Typhoo QT instant white tea, the UK’s number one decaffeinated tea, and original tea bags.
Other brands included in the sale include the London Fruit & Herb, Natureland and Heath & Heather fruit and herb tea brands for the export and health food markets and Freshbrew, Glengettie, Melroses and Ridgeways regional and speciality teas.
