May 10, 2024 - Business

CVC Capital agrees to sell controversial tea farms in East Africa

Kenyan tea farm workers

Kenyan tea farm workers in Kericho, Kenya. Photo: Billy Mutai/Anadolu Agency via Getty Images.

Private equity firm CVC Capital Partners has agreed to sell the East Africa tea gardens it acquired in 2022, as part of its €4.5 billion purchase of Unilever's tea business, to Sri Lanka's Browns Group.

Why it matters: This includes the controversial Kericho site in Kenya, where workers were sexually abused, according to a BBC investigation filmed just before Unilever turned over control.

  • Kericho also has been the site of protests against the introduction of leaf-picking machines that can replace workers, during which some of the machinery has been set ablaze.

Details: CVC and Browns Group will offer a 15% stake in the business to local community members via a public co-op. This is similar to what Browns Group did last year when it bought Kenyan tea gardens from Finlays, which also had been investigated by the BBC.

  • CVC will retain the rest of what it bought from Unilever, since renamed Lipton Teas and Infusions, which includes tea brands like Lipton, Pukka and PG Tips.

The bottom line: ultimately succumbed to the same concerns that had caused CVC

Go deeper, per an earlier FT story: "Other private equity firms had walked away from buying Unilever's tea business because of concerns about the plantations ... Advent International excluded the plantations from its offer for the unit, which was more than €750 million below CVC's winning bid ... Carlyle dropped out just days before the bid deadline, partly because of worries about Kericho."

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