Initially, the plantation business of Tata Coffee Ltd (TCL) will be demerged into TCPL's wholly-owned arm TCPL Beverages & Foods Ltd (TBFL), and then the remaining business of TCL which consists of extraction and branded coffee business, will be merged with TCPL.
Shares of Tata Coffee and Tata Consumer Products surged on Wednesday after Tata Consumer Products Ltd (TCPL) on Tuesday 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.
At 12:38 pm, the stocks of Tata Coffee Limited were up 9.74 per cent at Rs 215, whereas the stocks of Tata Consumer Products were up 2.84 per cent at Rs 764.
According to the company, initially, the plantation business of Tata Coffee Ltd (TCL) will be demerged into TCPL's wholly-owned arm TCPL Beverages & Foods Ltd (TBFL), and then the remaining business of TCL which consists of extraction and branded coffee business, will be merged with TCPL.
The demerger and merger of the company will happen through a composite scheme of arrangement. Under the scheme, 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.
With an annual turnover of Rs 11,600 crore, TCPL holds brands like TATA Salt, TATA Tea, Tetley, Eight O'clock, Himalayan Water, Tata Water Plus, and Tata Gluco Plus.