US & Asian companies team up in race for PG Tips

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One of the world’s largest buyout firms has partnered with a sovereign wealth fund in a £4 billion bid for tea brands including PG Tips.

Sky News reports that Massachusetts-based Advent and Singapore’s Government Investment Corporation (GIC) are discussing an offer with Unilever, which owns the brands.

However, the consortium faces competition from three private equity firms including Clayton, Dubilier & Rice, the frontrunner to buy Morrisons.

London’s Cinven and the Abu Dhabi Investment Authority (ADIA) may also make a combined offer.

READ MORE: Unilever unification could be scuppered by €11b Dutch tax

Unilever claims to be the biggest tea company but chief executive Alan Jope hopes to sell off the brands, which also include Lipton Ice Tea, because of their sluggish sales growth.

A deal is unlikely to be completed before 2022.

The auction does not include Unilever’s tea operations in India or Indonesia, or its ready-to-drink teas.

It is the latest division to be earmarked for sale by the Anglo-Dutch giant, which offloaded spreads businesses including Flora for over £5 billion in 2017.

GIC and Advent have worked together on previous deals, announcing a joint bid for Swedish biotech group Sobi earlier this month.

Advent also formed a consortium with Cinven and ADIA to buy Thyssenkrupp’s lift division for £13.6 billion last year.

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