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Unilever weighs scaling back on its tea business

By Bloomberg | July 21st 2020

Unilever is considering substantially scaling back the potential disposal of its tea business and may keep some operations in emerging markets, people with knowledge of the matter said.

The multinational consumer group is debating whether to hold on to its tea business in India and Indonesia, according to the people.

Unilever is also considering excluding its stake in a PepsiCo Inc venture that makes Lipton bottled drinks, the people said, asking not to be identified because the information is private.

Removing these assets from the sale could reduce the eventual proceeds by as much as several billion pounds and make the portfolio less attractive to some potential bidders, the people said. The remaining parts of the business could fetch about 4 billion pounds (Sh424 billion) to five billion pounds, according to the people.

Details on the sale process could be announced as soon as this month, the people said. Unilever is scheduled to announce its half-year results on July 23, according to its website.

Unilever has been seeking to reshape its portfolio as consumers’ tastes change.

Deliberations are ongoing, and details of the potential divestment are still subject to change, the people said. A representative for Unilever declined to comment.

Sales in Unilever’s tea business declined by a low-single-digit percentage in the first quarter of this year, mainly due to especially weak demand in India and restaurant closures globally.

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