Tata remerges Tata coffee; sees surge
Shares of Tata Coffee and Tata Consumer Products surged after Tata Consumer Products Ltd (TCPL) announced the merger of all businesses of Tata Coffee Ltd with itself as part of a reorganization plan in line with its strategic priority of unlocking synergies and efficiencies. The stocks of Tata Coffee Limited were up by 9.74 per cent at Rs 215, and the stocks of Tata Consumer Products were up by 2.84 per cent at Rs 764.
Tata has to demerge and remerge Tata coffee. This will happen through a composite scheme of arrangement. The shareholders of TCL (other than TCPL) will receive an aggregate of three equity shares of TCPL for every 10 equity shares held by them in TCL. This will be carried out through the issuance of one equity share of TCPL for every 22 equity shares of TCL in consideration for the demerger. As part of the merger, 14 equity shares of TCPL will be issued for every 55 equity shares of TCL.
TCPL has an annual turnover of over Rs 11,600 crores. It holds brands like TATA Salt, TATA Tea, Tetley, Eight O’clock, Himalayan Water, Tata Water Plus, and Tata Gluco Plus.Tata Consumer products holds a 57.48 per cent stake in Tata Coffee.
The company management stated: “These actions further TCPL’s objective of creating a future-ready organization and will act as a stepping stone for further simplification. These will also result in operational efficiencies, faster decision making and execution, creation of focused business verticals and unlocking of potential synergies. The consolidated actions outlined here are expected to generate material revenue, cost and other synergies over the medium to long term, following the completion of the proposed transactions and future simplification initiatives, which will be undertaken following the receipt of requisite approvals and processes”
Mr.Sunil D’Souza, MD & CEO at TCPL said that The restructuring initiative is in line with Tata Consumer Products’ strategic priorities – to unlock synergies and create a future-ready organization. This exercise will enable us to better leverage our supply chain, create customer-focused business verticals, and accelerate decision making & execution. This will be a stepping-stone for further simplification initiatives to achieve recurring operational, administrative and financial synergies.
