Tata Tea, which recently sold its stake in US energy drinks maker Glaceau to Coca Cola Co for over nearly Rs 4,800 crore, on Friday, said it will buy about 46 per cent stake in Mount Everest Mineral Water Ltd for around Rs 210 crore to gain a foothold in the bottled water segment.

The beverages company has agreed to buy 25.74 per cent stake in MEMWL for around Rs 115 crore and will acquire another 20 per cent later through an open offer. The acquisition would be funded entirely through debt, Tata Tea Chief Financial Office L K Krishnakumar said here.

Make open offer
The acquisition comes days after Tatas sold their 30 per cent stake in Glaceau to the world’s largest beverages firm Coca Cola for $1.2 billion, making a neat profit of over half a billion dollars in less than ten months.
Tata Tea will subscribe 50.99 lakh equity shares of MEMW on preferential basis at Rs 140 per share. This constitutes 15 per cent of the paid up capital on a fully diluted basis at a total price of Rs 70 crore.

Further, Tata Tea will acquire 31.10 lakh shares held by Foresight Holdings Pvt Ltd and Vinod Sethi, promoters of MEMW, and Salim Govani, MEMW Managing Director, at Rs 140 per share. This amounted to 10.77 per cent stake for around Rs 40 crore.

Tata Tea would also make an open offer within 100 days to buy 20 per cent stake at Rs 140 per share.  Mount Everest Mineral Water, which owns the Himalayan brand of bottled water, was promoted by Dadi Balsara. His stake was acquired by a group of investors holding 21.5 per cent equity in the company. Financial institutions hold 27.8 per cent while the rest are held by shareholders.

The company has a manufacturing facility in Himachal Pradesh with a bottling capacity of 2.50 lakh litres per day. Tata Tea would be looking at both domestic market as well as export market, including the US, for further acquisitions.