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Tetley purchase at £ 271 million
Business Standard — August 25, 2000

Tata Tea Ltd has clarified that it had acquired The Tetley Group at an "all-inclusive" cost of £271 million.

The clarification is in response to a report published in Business Standard on Wednesday that stated that the actual cost of Tata Tea’s acquisition of the UK-based Tetley was £400 million, inclusive of the debt component of £129 million taken over by Tata Tea.

"The debt of £129 million, referred to by the report, was paid for by the erstwhile owners and not inherited by Tata Tea Ltd", the clarification states. Tata Tea Ltd has also clarified that it will benefit significantly an directly from the integrated working between Tetley and its own operations.

This is contrary to the published report’s contention that there is no direct benefit to Tata Tea’s bottomline from the acquisition.

According to Tata Tea, special teams have been constituted comprising executives from Tata Tea and Tetley to work out joint action for integrated working between the two companies.

This includes sourcing of Tetley’s requirement from Tata Tea operations in India and Sri Lanka, increasing exports of packet teas under the Tetley brand from India and Sri Lanka to large new markets such as Russia and West Asia, and enhanced supply of instant tea from Tata Tea’s Indian operations to Tetley, US.

"To give effect to these plans calls for very detailed working on multiple fronts, both in the North India and South Indian estates. As it gets implemented, Tata Tea will benefit significantly and directly from the integrated working between the two companies as was originally visualised", the Tata Tea clarification adds.

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