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Tata to transfer food business from Tata Chemicals to Tata Global Beverages

Press Trust of India  |  New Delhi 

Wednesday announced the transfer of its branded business from Ltd to Ltd in an all shares deal that will create an over Rs 9,000

Ltd (TGBL) will buy the business of selling edible salt, spices, and lentils and give shares in return to Ltd (TCL).

TGBL will rename itself after the deal as Tata Consumer Products Ltd.

The Boards of Directors of TGBL and TCL, at their respective meetings Wednesday, approved the de-merger of the consumer products business of TCL into TGBL, the company said in a statement.

Each shareholder of TCL will get 1.14 new equity shares of for every one equity share held.

The proposed transaction will create a focused consumer products company with a combined turnover of Rs 9,099 crore and an EBIDTA of Rs 1,154 crore.

"The combination of the two consumer-focused businesses will benefit both sets of shareholders who will be able to participate in a larger business poised to grow their share of the foods and beverages market with a broader exposure to the attractive and fast growing FMCG sector," the statement said.

TGBL sells tea under Tetley and Tata Tea brands as also coffee under Eight O'Clock brand and bottled water. TCL, the world's third-largest of soda ash, will focus on its core business after this deal.

The statement said TCL shareholders will retain their ownership of a focused and specialty products company with a leading portfolio of products in basic and specialty chemicals and strong cash flows to support future growth.

The transaction is subject to necessary statutory and regulatory approvals including those of National Company Law Tribunal, stock exchanges, SEBI, and respective shareholders.

Commenting on the announcement, N Chandrasekaran, Chairman, said: "Tata Consumer Products consolidates our current presence in and beverages in the fast-growing consumer sector. Through this combination, we have created a strong growth platform to meet the growing aspirations of Indian consumers."

TGBL said the transaction is consistent with the strategy to deepen the firm's presence and transform into a

"Existing TGBL shareholders will benefit significantly as the cnsumer products business increases our exposure to high growth product categories and provides a strong platform to seize new opportunities in this sector. We will also continue to nurture and grow our global brands," he said.

R Mukundan, Managing Director and CEO, TCL said: "This combination provides significant benefits to our shareholders by unlocking the value of our consumer products business. In line with its strategy to be a leading science-based solutions company, will aggressively grow its specialty chemistry business in the areas of agro-science, nutrition science, material science and

"In addition, the basic chemistry business of Tata Chemicals will be the global partner of choice for soda ash, salt and bicarbonate to leading brands of food, pharma, detergents and glass.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, May 15 2019. 17:15 IST