Tata Tea, Tetley merger by Dec
Business Standard — September 20, 2005

The merger will compensate for the recent divestment in tea gardens. Tata Tea today sought shareholders' approval for the merger of Tata Tetley with itself in an attempt to compensate for revenue loss after it recently divested a part of its portfolio of tea gardens. The approval was sought through postal ballots, and the company will announce the results in the next 48 hours. Speaking on the sidelines of the company's extra-ordinary general meeting, Tata Tea Managing Director Percy Siganporia said, the company wanted to grow the tea-bag business, which was under Tata Tetley. He, however, refused to give details.

Siganporia said, the benefits of the merger would come in the third or the fourth quarter of the current financial year. The tea-bag business under Tata Tetley cater to markets like Poland, Australia, Russia and China, which will now all come under Tata Tea. The merger would bring about more efficient and better utilisation of available resources, he said. After the acquisition of Tetley, the company moved its Australian operations into Tata Tetley and ramped up the capacity of the plant.

The entire manufacturing operations of Tetley, Australia, located at Yara, were shut down and transferred to the export oriented unit (EOU) in Kochi with the idea that the factory would source tea from across regions, add value and then market the product. Tata Tetley became a subsidiary of Tata Tea as a consequence of the acquisition of Tetley in 2000. The company was incorporated during 1992 and after the formation of the joint venture between Tata Tea and The Tetley Group, UK, the business of the Tetley division of Tata Tea was transferred to the joint venture company in 1994.

Post-acquisition, the company eased out the Tata Tetley brand from the domestic market so that Tata Tetley could focus on exports. The company's role in the domestic market is now restricted to that of a tea-bag convertor for Tata Tea, which launched the "Tetley" brand tea-bags under a brand license agreement with The Tetley Group.