Mumbai: Unilever PLC has agreed to sell its global tea business to CVC Capital Partners for $5.1 billion, concluding a process of reviewing and spinning off the division that took more than two years. The business being sold, called Ekaterra, hosts a portfolio of 34 tea brands including Lipton, PG Tips, Pukka Herbs, and Tazo, and generated revenues of two billion euros in 2020.

The sale, however, excludes Unilever’s tea units in India and Indonesia and its partnerships in the ready-to-drink tea market, such as its bottled tea joint venture with PepsiCo.

CVC reached an agreement with the British multinational consumer goods giant after beating out rival private equity bidders including Advent International. Ekaterra will be sold to CVC's Capital Fund VIII on a cash-free and debt-free basis in a process that is expected to conclude in the second half of 2022, Unilever said in a statement on Thursday.

The company said in January 2020 that it was starting a strategic review of its tea business that could result in a partial or full sale. The transaction marks a much-needed win for Unilever's chief executive officer Alan Jope, who’s been seeking to rejig the company’s portfolio to keep up with changing consumer tastes.

“The evolution of our portfolio into higher growth spaces is an important part of our growth strategy. Our decision to sell ekaterra demonstrates further progress in delivering against our plans," Jope said.

The sale relieves Unilever of a business that has been a drag on earnings for several years as demand for black tea waned and consumer tastes changed in recent years amid a shift to green tea and other flavourful herbal alternatives.

The global consumer goods major has been under some pressure as its stock languishes and it struggles to compete in the face of high inflationary costs, especially in emerging markets, its biggest source of revenue.