Tata Tetley: Managing the Tetley Acquisition

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Tata Tea Limited (TTL), is the second largest tea company in India. It has a significant presence in over 35 countries. Branded teas contribute 88% of the consolidated turnover of the group, with the remaining 12% coming from bulk tea, spices and investment activities. In 2000, TTL had acquired Tetley a major UK tea manufacturer. Analysts had expressed doubts as to whether the deal would create value. Three years after the takeover, things seem to be improving. But there are still concerns as to whether TTL can service the huge debt burden resulting from the deal and whether the synergies projected before the merger can be realised. The case deals with all these aspects along with a detailed picture of how the acquisition actually took place and how the integration is being managed.