Beverages giant Coca-Cola plans to acquire US energy drink firm Glaceau, in which Tata Tea has 30 per cent stake, in a deal that could be worth over $3 billion, US media reports said on Wednesday.
Global soft drink giant Coca-Cola has made a pre-merger filing with the US anti-trust regulators regarding a possible acquisition of energy drink maker Glaceau, in which India's Tata Group holds a 30 per cent stake.
Soft drink giant Coca-Cola on Friday announced it will acquire US energy drink maker Glaceau, in which India's Tata Group has 30 per cent stake, for $4.1 billion in cash.
Coke looking to buy US firm; may lead to Tatas selling their stake.
According to Indian tax laws, an acquisition or sale made by an overseas subsidiary of an Indian company is not liable for taxation in India.
Tata Group companies Tata Sons and Tata Tea, under an agreement with the US firm, will jointly purchase the 30 per cent stake owned by TSG consumer partners, the company said.
Tata Tea's exit from Glaceau, its largest acquisition so far, puts the question in context.
Tata Tea, which sold its stake in US-based Glaceau last year, plans to begin selling a low-priced bottled water in the country through its unit Mount Everest Mineral Water, to take on global rivals such as Coca-Cola and PepsiCo in the Rs 1,500-crore packaged drinking water market."We want to do it quickly,'' Pradeep Poddar, managing director and CEO, Mount Everest, said. "The market is still very young and we can evolve it further through marketing new offerings."
Objective of the examination is to study the tax implications of such deals.
Coke to invest $250 m in India in 3 years
The gap between stand-alone Indian figures and global figures can be the difference between sell and buy.
With substantial cash reserves, a buoyant domestic market and increasing global opportunities, almost every consumer goods (FMCG) company is looking for acquisition targets.
As consumers in India seek variety and innovative products, there's a lot of interest among investors for healthier products.
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