Unilever Plc, the owner of Lipton and PG Tips, agreed to sell some tea assets to buyout firm CVC Capital Partners in one of the year’s biggest carveouts by a European company.

The transaction values the business at 4.5 billion euros ($5.1 billion) on a cash-free, debt-free basis, Unilever said in a statement Thursday, confirming an earlier report by Bloomberg News. CVC has reached an agreement with Unilever after beating out rival private equity bidders including Advent International. 

A sale of the tea business, called ekaterra, marks a much-needed win for Unilever Chief Executive Officer Alan Jope, who’s been seeking to rejig the company’s portfolio to keep up with changing consumer tastes. The firm abandoned a planned $1 billion sale of a beauty product portfolio earlier this year after failing to attract sufficient demand from potential buyers, people familiar with the matter said.  

“The evolution of our portfolio into higher growth spaces is an important part of our growth strategy,” Jope said. “Our decision to sell ekaterra demonstrates further progress in delivering against our plans.”

Ekaterra has a portfolio of 34 brands including Lipton, PG tips, Pukka, T2 and TAZO, and generated about 2 billion euros in revenue last year, the company said. Unilever said it expects to complete the sale in the second half of 2022. 

Under former CEO Paul Polman, Unilever sold its margarine and spreads business to KKR & Co. for about $8 billion. The company tried to profit from growth in herbal tea by acquiring the Pukka brand in 2017. That label will also be included in the sale.

European buyout giant CVC oversees about $165 billion of committed capital, according to its website, after raising a record buyout fund last year. The company has invested in both high-profile brands as well as food and beverage producers before. Its holdings have included the Formula One auto racing series, Swiss watchmaker Breitling AG, Indonesian snack maker GarudaFood and Czech brewer StarBev, according to its website.

Read more/Source: Bloomberg