Tata Tea reaps 77 per cent return in Glaceau deal

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Coca-Cola’s decision to acquire Glaceau for $4.1 billion will help Tata Tea pocket $1.2 billion. Tata Tea had bought 30 per cent stake in Glaceau in August 2006 for $677 million. The purchase of Glaceau will give Tata Tea a return of about 77 per cent on its investment.

It is still unclear what Tata Tea will do with the money. Insiders are keeping mum on whether the company will enter any sort of tie-up with Coca-Cola. Analysts say that the company may also look at the possibility of investing this money in the debt-ridden Tetley, which it acquired some years back. Some feel that taking into account Tata Tea’s ambition to have a strong beverage portfolio across markets, it will not come as a surprise if the company goes into an acquisition mode.

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