The recent decision by Tata Tea to cash out of Energy Brands Inc (EBI) of the US, maker of Glaceau Vitaminwater, has shown that the Tata group has the strategic maturity to turn adversity into a huge profit opportunity. By selling its 30% stake in Glaceau for a staggering $1.2 billion at a time when Coca-Cola was taking over the US enhanced water maker, the Tata group has made a neat $523 million pre-tax profit from the sale.

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When the Tata group bought its stake in Glaceau last August, the deal was expected to herald the group’s entry into the burgeoning US enhanced water and beverages segment, seen as a big business opportunity given the scale of the US health and wellness revolution. In fact, Tata group strategist RK Krishna Kumar was quizzed by journalists back then on why the group didn’t seek more than 30%, since a higher stake would have given the group a stronger say in how the company is run. But clearly, Tata and J Darius Bikoff, the colourful founder of EBI, had hammered out a working relationship which gave Tata enough reason to fork out a hefty $677 million for the 30% stake. Bikoff, it was pretty obvious, wasn’t willing to sell more to Tata, and the group, on the other hand, got two berths on the EBI board—Ratan Tata himself, as chairman, and Krishna Kumar as non-executive director.

In the end, things may not really have worked out quite as Tata would have hoped. The Coca-Cola Company’s muscle proved to be enough for Bikoff to sell EBI for $4.1 billion, marking what must be a satisfying acquisition for the Atlanta-based fizz major. And it is here that the 30% factor turned out to be vital for the Tata group. With this size of shareholding, the group was left with little or no choice but to exit the company, since it would have been pointless to stay on as a minority shareholder with Coca-Cola now in the picture. Besides, adopting a confrontationist posture is not the Tata group’s style in cases like this. Hence, the exit would hardly come as a surprise to seasoned Bombay House watchers.

However, the same 30% which denied Tata a chance to continue its US beverages strategy uninterrupted through EBI also proved to be sizeable enough to earn a windfall for Tata Tea and its shareholders. In just nine months, the money invested in Glaceau had generated a return of over 77%, and news of the imminent sale saw the Tata Tea stock surge. Between April 24, when word of Coca-Cola’s interest in Glaceau started coming in, and May 30, the Tata Tea share has sprung up 30.13%. Clearly, shareholders won’t regret the decision.

Krishna Kumar talked about the learnings from the Glaceau experience, too—that it gave the Tata group a close understanding of the US beverages market. That knowledge can be put to good use in future acquisitions

Krishna Kumar did concede at a conference call on the day of the stake sale that the story would have been quite different had the Tata group got a majority stake. But with $523 million pocketed from the sale, there’s enough to look forward to. The proceeds can go towards fully paying off the debt taken for the acquisition ($427 million), or even for future acquisitions. Tata Tea is keen to reinvigorate its US beverages strategy at the earliest, and targets are already on the radar. So a part of this money can always be earmarked for future inorganic growth in that market. Krishna Kumar talked about the learnings from the Glaceau experience, too—that it gave the Tata group a close understanding of the US beverages market. That knowledge can be put to good use in future acquisitions. There may be one soon, and this time, it wouldn’t be wrong to assume the group would aim for a majority stake.

But more than anything else, the biggest learning from the Tata Tea-Glaceau story is that holding one’s nerve free of emotion in business pays well. A $523 million cheque for working together for some time, and then agreeing to walk away without any fuss is good business sense.