Hindustan Lever, the Indian subsidiary of Anglo-Dutch conglomerate Unilever, is mulling the acquisition of the Bangalore-based Amalgamated Bean Coffee Trading company (ABC).

According to the Indian newspaper the Economic Times, Hindustan Lever is already involved in negotiations with ABC over a strategic alliance to grow the latter group’s Café Coffee Day outlets.

ABC is believed to have offered a 26% stake to Hindustan Lever in return for substantial investment. Worth Rs3bn (US$64m), ABC operates 22 retail outlets in southern India, and is hoping to open a further 100 outlets across India over the next 12 months.

Unilever has largely exited the coffee business, with Hindustan Lever now one of a very small number of subsidiaries that retain a substantial interest in coffee. However, Unilever has given international subsidiaries the green light to continue with businesses if they are market leaders.