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MUMBAI, Oct 13 (Reuters): India's Tata Tea Ltd. said today it would acquire US specialty tea brand Good Earth for an undisclosed sum, sending its shares higher.
The world's second-largest branded tea company will buy Santa Cruz, California-based FMALI Herb Inc. and Good Earth Corp., which sells herbal, fruit-flavoured, medicinal and traditional teas, through its subsidiary, Tetley US Holdings Ltd.
Good Earth has a strong presence on the western coast of the United States, and a 3.7 per cent share of the specialty tea market, with a turnover of more than $16 million, Tata Tea said.
"This acquisition is an important contribution to our plans for growing the Tata group's tea business around the world," Ken Pringle, executive vice chairman and chief executive officer of the Tetley group, said in a statement.
"We believe there is real potential for growth in the specialty tea sector of the US market and elsewhere in the world," Pringle said.
Good Earth will continue to blend and pack teas in Santa Cruz and retain the brand name, which is licensed to FMALI Herb Inc., according to the statement. Tata Tea-which acquired UK's Tetley for $432 million in 2000 -- and other top Indian tea firms have lately been divesting their tea plantations to focus on their brands.
"We were only a marginal player in the US tea market (with Tetley) with a presence in black tea and a small presence in specialty," Tata Tea Managing Director Percy Siganporia told Reuters.
"What this acquisition does is give us critical mass in specialty, which is very fast-growing. It gives us not just the brand, but also knowledge of the US market," he said.
Also Thursday, Britain's Premier Foods Plc said it had agreed to sell its tea business, which includes the Typhoo tea brand, to India's Apeejay Surrendra for 80 million pounds ($139.5 million) in cash.
Typhoo is UK's third-biggest tea brand after Unilever's PG Tips and Tetley. The Kolkata-based Apeejay group also owns luxury hotels and bookstores.
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