Tata Group keen on combining its chemicals and beverages businesses
Category: #retail  By Sunil Hebbalkar  Date: 2019-05-17
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Tata Group keen on combining its chemicals and beverages businesses

In a move to strengthen its footprint in the consumer business, the Indian multinational conglomerate Tata Group is reportedly on the verge of merging its chemicals and beverages businesses, Tata Chemicals Limited (TCL) and Tata Global Beverages Ltd. (TGBL) respectively.

If reports are to be believed, this move is a result of the exploratory talks held by the Tata Group in March 2017 to merge both of the major consumer businesses in an all shares deal. Under the deal, TGBL will purchase TCL’s business selling spices, edible oils, lentils, etc. and provide shares to the company in return. Reportedly, the proposed transaction will create a combined company, to be named the Tata Consumer Products Ltd., with a projected joint turnover of around Rs. 9,099 crore and an EBIDTA of Rs. 1,154 crore. Each TCL shareholder is expected to receive 1.14 new TGBL equity shares for each equity share held, cited the sources.

The Mumbai-based conglomerate recently issued a statement stating that the combination of the two leading consumer-focused businesses is likely to benefit both the groups of shareholders, who will now be able to participate in a larger business that is slated to increase their share of the food & beverages market, while enhancing exposure to the flourishing FMCG sector. The statement added that TCL shareholders would retain their ownership of a highly focused, science-based chemistry solutions & specialty products company having a leading product portfolio in basic, specialty chemicals as well as strong cash flows to promote future growth.

For the record, TBGL sells bottled water, coffee under the Eight O’Clock brand, and tea under the Tata Tea and Tetley brands. While, TCL is the third-biggest producer of soda ash and following this deal, the company plans to focus on its core chemicals business.

Reportedly, the latest transaction is subject to critical regulatory and statutory approvals, including those from stock exchanges, SEBI, National Company Law Tribunal, and the respective shareholders. 

Source Credits: https://www.cnbctv18.com/retail/tata-group-set-to-merge-tata-chemicals-consumer-business-with-tata-global-beverages-3328171.htm

https://www.businesstoday.in/current/corporate/tata-group-tata-chemicals-transfer-to-tata-global-beverages-business/story/346906.html



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Sunil Hebbalkar

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Sunil Hebbalkar

Sunil Hebbalkar develops content for Algosonline, Market Size Forecasters, and a couple of other platforms. A Post graduate mechanical design engineer by qualification, he worked as an intern at the defense lab for one year in the engine design and development departm...

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