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Tata Coffee merger with Tata Consumer Products, TCPL Beverages set for January 1

Tata Coffee merger with Tata Consumer Products, TCPL Beverages set for January 1

Chandrasekaran's leadership has been instrumental in driving the growth of the Tata Group since he took the position of Chairman, despite facing various strategic challenges in the past. Although coming from the helm of India’s top technology firm, Chandrasekaran has addressed all the challenges with his 3S strategy of simplification, synergy, and scale. He has given strong, strategic direction to businesses that were not doing well, attracted the right talent, and made hard and bold decisions on some assets. Tata Sons chairman is consolidating group firms to weed out duplication, increase efficiency, streamline operations, allocate capital more efficiently, and unlock value in businesses that are non-core and face growth headwinds.

Earlier in 2020, he guided the demerging consumer products business of Tata Chemicals and merged it into Tata Consumer Products Limited (TCPL). In September 2022, Tata Steel announced the merger of seven of its subsidiaries, including four listed and three unlisted companies. Another vertical that has been finalized for merger is aviation. A newly bought airline by Tata in early 2022, i.e., Air India, will be integrated with Vistara Airlines to form the airline’s full-service business by March 2024, while AirAsia India will be merged with Air India Express to form the group company’s low-cost arm.

In November 2022, shareholders of Tata Consumer Products Ltd., Tata Coffee, and TCPL Beverages and Foods approved the reorganisation scheme of the three companies in a vote held on November 12. Under the scheme, Tata Coffee will be merged with Tata Consumer Products and its wholly-owned subsidiary.

In the latest filing with the exchange, Tata Coffee Ltd., a subsidiary of Tata Group, announced its merger with Tata Consumer Products Ltd. (TCPL) and TCPL Beverages & Foods Ltd. (TBFL) on January 1, 2024. The merger will dissolve without winding up on January 1, 2024, and the offices of all directors and key managerial personnel of the company will be vacated on that date. Tata Coffee has set January 15, 2024, as the record date for determining the shareholders of TCL to whom equity shares of TCPL would be allotted pursuant to the demerger and the amalgamation.

The plantation business of Tata Coffee will be merged into TCPL Beverages & Foods, a wholly-owned subsidiary of TCPL. In exchange, TCPL will issue one equity share for every 22 equity shares held in Tata Coffee to existing shareholders. The rest of the business of Tata Coffee will be merged with TCPL in exchange for the issuance of 14 equity shares of TCPL for every 55 equity shares held by Tata Coffee to existing shareholders.

After the merger, Tata Coffee will be dissolved, but existing shareholders will receive 3 shares of TCPL for every 10 shares they hold as of the record date for the amalgamation. The proposal was passed by the requisite majority of three-fourths of the shareholders in attendance at the meeting.

Shares of Tata Consumer Products are trading 3.49 percent higher at Rs. 1,077 following the news.

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