Unilever still in discussion for sale of Kenyan stake under Limuru Tea

KENYA – Netherlands-based Puccini Bidco has offered to acquire 100 per cent of Limuru Tea after an earlier bid for a 52 per cent stake was rejected by smaller shareholders.

On July 4, 2022 Puccini Bidco B.V., served Limuru Tea with notice of intention to acquire up to 100 per cent of the firm’s ordinary shares.

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Puccini, a special purpose investment vehicle majority owned by the CVC Partners had last year disclosed that it did not intend to buy the entire Limuru Tea but was instead set to buy the 52 per cent stake owned by Unilever, reports People Daily.

The move was however contested by smaller investors who went to court to block the sale.

Limuru Tea Plc owns 282 hectares of tea plantations situated four kilometres to the east of Limuru Town. The Company is an outgrower to Unilever Tea Kenya Limited (UTKL).

UTKL provides management services to Limuru Tea Plc’s in manufacturing, selling and marketing of its tea.

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The Limuru Tea estate green leaf is manufactured in the nearby UTKL’s Mabroukie factory from where it is sold for export at the Tea Auction.

The company’s annual report shows that the main shareholders are Unilever Kenya at 52 per cent, Stanchart nominees at 25 per cent, Hassan Popat at 3 per cent, Ropat Nominees Limited at 3.3 per cent, Alimohamed Adam at 2.5 percent, Equity Nominees at 2.1 per cent among others.

Unilever Plc has announced mid last year, its intention to separate its global tea business including a spin-off from its tea interests in Kenya.

The sale of the business was triggered by a number of factors including the falling demand for black tea which has been causing a hit to its sales turnover.

The move follows a decision by its parent firm Unilever Group to separate its global tea business including tea plantations to become a separate entity and divest in most markets.

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The maker of the popular Lipton, Brooke Bond and PG Tips brands, had initially indicated that it will retain the tea businesses in Kenya, India and Indonesia and the partnership interests in the ready-to-drink tea joint ventures with PepsiCo.

However, in a notice to shareholders of Limuru Tea, the Unilever Kenya board said assets including land and factories will be sold to a new owner.

As the consumer goods company a waits to finalize sale of the Kenyan asset, it completed sale of its tea business, Ekaterra, to the CVC Capital Partners Fund VIII for €4.5 billion (US$4.64B).

The newly announced deal still excludes Unilever’s tea business in India, Nepal, and Indonesia, as well as its interests in the Pepsi Lipton ready-to-drink tea joint ventures and associated distribution businesses.

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