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Thursday, July 26, 2001

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Tata Coffee joins hands with Barista

By Our Staff Correspondent

MUMBAI, JULY 25. Tata Coffee, Asia's leading coffee company and Barista Coffee Company, the country's largest and fastest growing retailer of fine coffees, have joined hands to form Asia's leading consolidated coffee player. The strategic partnership was finalised at the Tata Coffee board meeting here today.

Tata Coffee has acquired 34.3 per cent equity in Barista for Rs. 26 crores. This excludes the ESOPs. Eight per cent of ESOPs will be granted over three years and Tata Coffee's holding will be coming down by 2 per cent after three years.

Barista's equity base will increase by a further 5.2 million shares. Initially the equity base was Rs. 10 crores.

The strategic alliance consolidates Tata Coffee's position in the branded coffee segment and fortifies Barista's leadership in its experiential category. Given its early mover advantage, Barista provides a strong platform in the coffee retail segment, which combined with the inherent strengths of Tata Coffee, gives the company a unique competitive advantage.

The association with Tata Coffee would contribute to strengthening the distribution network and also provide access to alternative channels in the hospitality, airline catering and other allied businesses. The alliance will result in backward and forward integration of the entire coffee value chain, allowing Barista and Tata Coffee to take ownership of the coffee category from `bean to cup'.

This integrated player will look at a strengthened presence in the domestic market resulting in considerable increases in operating efficiencies as well as market share. The strategic alliance would also expand globalisation opportunities in the world coffee market. The alliance with Tata Coffee is another step for Barista to reinforce its presence and create a platform that supports the growth of the business in India and overseas through Tata's international joint ventures and networks.

Mr. R. K. Krishna Kumar, chairman, Tata Coffee said, ``This is an exciting new opportunity for both companies. We are seeing the birth of a powerful new entity in the coffee industry with unique strengths that will enable it to achieve market leadership.''

Mr. Ravi Deol, managing director, Barista Coffee Company said, ``Our customers are very passionate about Barista, and we look at our alliance with Tata Coffee as a focussed commitment towards providing them with a unique coffee experience, and to augmenting the coffee category as a whole. With this alliance, we will leverage and fortify our core strengths, and consolidate our leadership in the coffee market in India and also create a platform for global growth.

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