In a significant development, Tata Coffee and Tata Consumer Products are set to merge with Tata Consumer Products, with the amalgamation taking effect on January 1. This move, part of a larger reorganization plan, has sent stocks soaring, with Tata Coffee and Tata Consumer hitting fresh 52-week highs.
Tata Coffee witnessed a remarkable surge, rising by 4.2% to reach a new 52-week high of ₹321.15. The market capitalization concurrently reached ₹5,922 crore. Tata Consumer Products also experienced a positive trend, opening higher at ₹1,063 and climbing 3.5% to reach a new 52-week high of ₹1,078.20, boosting the market capitalization to ₹99,088 crore.
The proposed merger, effective from January 1, involves Tata Consumer Products and Tata Coffee amalgamating into TCPL Beverages & Foods. The record date for the share swap has been set as January 15. Shareholders of Tata Coffee, excluding Tata Consumer Products, will receive three equity shares of Tata Consumer Products for every ten equity shares held. The demerger will involve the plantation business of Tata Coffee being transferred to TCPL Beverages & Foods.
In response to this development, Tata Coffee’s stock has seen a consistent uptrend over the last five sessions, witnessing a cumulative rise of 10.5%. Tata Consumer Products has maintained an upward trajectory for eight consecutive sessions, recording a surge of 13.5% since December 19.
Both Tata Coffee and TCPL Beverages & Foods notified the effective date of the composite scheme of arrangement, confirming January 1, 2024, as the appointed and effective date of the scheme.
The reorganization plan, approved by the National Company Law Tribunal in October 2023, is a strategic move to unlock synergies and efficiencies within the Tata Group. As part of this plan, the plantation business of Tata Coffee will be demerged into TCPL Beverages & Foods, while the remaining business, encompassing extraction and branded coffee, will merge with Tata Consumer Products.
This amalgamation aligns with Tata Group’s commitment to strategic restructuring, creating opportunities for enhanced efficiency and synergy realization within its diverse business portfolio.
As the reorganization plan takes effect, investors are keenly observing the impact on Tata Coffee, Tata Consumer Products, and TCPL Beverages & Foods, expecting this strategic move to drive growth and unlock value within the Tata Group’s extensive ecosystem.
