Tata Tea on a global visit, to bid for Cadbury Scheweppes beverage arm

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Tata Tea’s appetite for global beverages companies doesn’t seem to dwindle. After buying Tetley, Good Earth, Eight O’ Clock Coffee, Himalayan Water and selling 30% stake in Glaceau for handsome profit, Tata is likely to bid for US drinks arm of UK-based Cadbury Schweppes. Cadbury Schweppes is looking to offload its US beverage business as it aims to concentrate on its confectionery business to improve profitability. The beverage business includes Snapple range of fruit, diet drinks, iced teas and Dr. Pepper, 7UP, Snapple and Hawaiian Punch. Tata Tea is in talks with PE funds such as Blackstone, Lion Capital and they could bid as a consortium. Apart from this other PE players such as Kohlberg Kravis and Roberts, Thomas Lee Partners, Bain Capital Cott Corp and Coca-Cola have shown interest in the deal, which is expected to fetch $16 billion. It the Tata consortium emerges as the winner, Tata Tea would only like to have Snapple under its portfolio and would give other brands to other players in the consortium. The move could pay off for Tata Tea as it would help it expanding and diversifying its portfolio so that it can offset the sluggish growth in core businesses of tea and coffee.