Sale of two British tea brands to Luxembourg private equity outfit faces backlash as fears are raised over jobs
The sale of two British tea brands to a Luxembourg private equity outfit faced a backlash as fears were raised over jobs.
Unilever this week agreed to sell its tea division, which makes Lipton and PG Tips, for £3.8billion to CVC Capital Partners.
It is the latest swoop by private equity firms who have gone on a spending spree, snapping up more than £68.5billion worth of British firms so far this year, according to data from Refinitiv. Among those sold are Morrisons and Asda.
Storm brewing: Unilever agreed to sell its tea division, which makes Lipton and PG Tips, for £3.8billion to CVC Capital Partners
CVC was part of a consortium that bought Debenhams in 2003. The consortium picked up £1.2billion in dividends before returning it to the stock market less than three years later.
When it bought Debenhams, the retailer had £100m of debt but by the time it was relisted on the Stock Exchange that had ballooned to £1billion. It folded in December 2020.
Labour peer Lord Sikka, a trained accountant and professor warned: ‘I have the usual concerns about whether these tea companies will have a long term future, or will they be butchered to provide the highest possible returns?’
Union Unite called for urgent talks with Unilever.
It represents 300 production and engineering staff at the PG Tips site in Manchester.
General secretary Sharon Graham said private equity buyouts in the UK have a pattern of asset stripping, job cuts and loading companies with debts to turn a huge short-term profit.