Tata Global Beverages Limited through its subsidiary, Tata Coffee Limited has formed 50:50 JV – Tata Starbucks Limited with Starbucks group.
The first cafe will open by August-September and will be named – Starbucks Coffee – A Tata Alliance. The JV plans to open 50 outlets in the initial phase, beginning with Mumbai and Delhi and expand into other cities and Tier-II towns. The initial investment will be R400Cr ($80Mn).
Luthra & Luthra Law Offices advised Tata for the deal.
According to MOU, Starbucks will set up stores in the Tata group’s retail outlets and hotels, besides sourcing and roasting coffee beans from Tata Coffee’s Kodagu facility.
Starbucks, which runs over 16,000 stores worldwide, has been in talks with the Future Group, Reliance and Jubilant for an entry into India, but none of those discussions fructified.
Headquartered in Seattle, Starbucks operates in more than 50 countries. It has been sourcing coffee beans from India for the last seven years. Starbucks sells a wide variety of coffee and tea products with a range of complementary food items, primarily through retail stores.
Tata Global Beverages Limited engages in the development, marketing, and distribution of tea products. Tata Coffee Limited engages in growing, curing, manufacturing, marketing, retailing, and exporting coffee and tea in India and internationally.
The company produces more than 10,000 MT of shade grown Arabica and Robusta coffees at its 19 estates in South India and its two Instant Coffee manufacturing facilities have a combined installed capacity of 6000 metric tones.
It exports green coffee to countries in Europe, Asia, Middle East and North America. In 2006, Tata Coffee acquired Eight ‘O Clock Coffee Co., a segment leader in the US coffee retail market for US$ 220 million.
Last August, Tata Global acquired 31% stake in US-based Rising Beverages, which is known for vitamin water based products. It had also signed a MoU with Kerala Ayurveda to form a joint venture for product development.
In 2010, the company formed a joint venture firm with Pepsico – NourishCo Beverages, to produce non- carbonated ready to drink beverages.
In this segment major players include Barista (200 outlets), Cafe Coffee Day (1,040 outlets) and Costa Coffee and others (100).
source: http://www.dealcurry.com / Home> Category: Mergers & Acquisitions> Industry: Agro/ Food & Beverage / by Charmi Gutka/ January 31st, 2012
