Tata Consumer Products Ltd (TCPL) on Tuesday announced the merger of all businesses of Tata Coffee Ltd with itself as part of a reorganisation plan in line with its strategic priority of unlocking synergies and efficiencies.
While the plantation business of Tata Coffee Ltd (TCL) will be demerged into TCPL’s wholly-owned arm TCPL Beverages & Foods Ltd (TBFL), the remaining business of TCL, consisting of its extraction and branded coffee business, will be merged with TCPL, the company said in a statement.
The demerger will happen as the first step and the merger will happen as the immediate second step, both being proposed through a composite scheme of arrangement.
Under the scheme, the shareholders of TCL (other than TCPL) will receive an aggregate of 3 equity shares of TCPL for every 10 equity shares held by them in TCL.
This will be carried out through the issuance of 1 equity share of TCPL for every 22 equity shares of TCL in consideration for the demerger. For the merger, 14 equity shares of TCPL will be issued for every 55 equity shares of TCL, it added.
“This will enable the consolidation and 100 per cent ownership of the branded, extractions & plantations business of TCL into TCPL and its wholly-owned subsidiary,” it said.
The boards of directors of TCPL and TCL, at their respective meetings held on Tuesday, have approved the combination of the plantation business of TCL with TBFL, it said.