Tata Consumer Products to recast its India and overseas businesses

In a bid to simplify, align, and synergise its business, Tata Consumer Products (TCPL) Tuesday announced reorganisation of its India and overseas businesses.  The company also proposed to purchase of a 10.15 per cent minority interest in its UK subsidiary, TCP UK, from Tata Enterprise (Overseas), Switzerland, (TEO).

Also, TCPL board approved the demerger of the plantation business of Tata Coffee (TCL) into TCPL Beverages & Foods (TBFL), a wholly owned subsidiary of TCPL. It also approved the merger of the remaining business of TCL, consisting of its extraction and branded coffee business with TCPL.

The demerger will be the first step and the merger will be the immediate second step, both being proposed through a composite scheme of arrangement.

Upon effectiveness of the scheme, the shareholders of TCL (other than TCPL), as on the record date, would receive an aggregate of three equity shares of TCPL for every 10 equity shares held by them in TCL, through the issuance of one equity share of TCPL for every 22 equity shares of TCL, in consideration for the demerger (according to the approved share entitlement ratio). They would get 14 equity shares of TCPL for every 55 equity shares of TCL, in consideration for the merger (based on the approved share exchange ratio).

“Through this transaction, TCL shareholders will get access to multiple growth engines and participation in a larger and fast-growing FMCG business. TCPL shareholders are expected to benefit from better synergies and business efficiencies going forward,” TCPL said in its press release.

The scheme is subject to the necessary statutory and regulatory approvals.

For the purchase of minority interest in its UK subsidiary, TCPL will issue 74,59,935 equity shares/ 0.80 per cent stake (computed on a post-preferential issue basis) to TEO, by way of a preferential issue in accordance with the applicable regulations.