Merger of Tata Coffee and Tata Consumer Set for 1-Jan-2024

Tata Coffee is set to complete its merger with Tata Consumer Products Limited (TCPL) and Tata Beverages and Foods Ltd (TBFL) on January 1, 2024. The company announced this move in a stock exchange filing on Thursday, with the record date for determining TCPL shareholders eligible to receive equity shares of TCPL being set for Monday, January 15.

This merger aligns with Tata's broader reorganization plan to unlock synergies and efficiencies among its three entities – Tata Consumer Products Ltd, Tata Coffee, and TCPL Beverages and Foods. Shareholders of these companies had previously approved the merger during a vote on November 12, 2022.

The scheme involves Tata Coffee merging with Tata Consumer Products and its wholly-owned subsidiary. Additionally, Tata Coffee's plantation business will be merged into TCPL Beverages & Foods, a wholly-owned subsidiary of TCPL.

Shareholder Benefits

Existing shareholders will receive one equity share in Tata Consumer Products for every 22 equity shares held in Tata Coffee by TCPL, as part of the reorganization scheme. This restructuring proposal aims to streamline business operations and enhance shareholder value.

On December 28, Tata Coffee and Tata Consumer Products shares reached their 52-week high at Rs 309.05. Tata Consumer Products stock settled near the day’s high, at ₹1,048.55, up 2.12%. The market has responded positively to the strategic move, indicating investor confidence in the reorganization plan.

After the recent news, Tata Coffee's stock saw a boost, going up by 3.76% on December 29. It's been doing well not just in the short term – up by 15.75% in the past month – but also in the medium and long term, with gains of 29.06% in the past six months, 45.82% in the past year, and an impressive 228.54% over the last five years.

Similarly, Tata Consumer Products' stock showed a positive trend, rising by 3.42% on December 29. Over the short term, it has performed well, with a gain of 15.32% in the past month. Looking at the mid-term and long-term performance, stock increased  25.06% in the past six months, 38.72% in the past year, and an 403.55% growth over the last five years.

Final Words

Tata's merger is a key move in their plan to streamline operations, making the business more unified and efficient. The Scheme takes effect on January 1, 2024, and shareholders can expect the benefits and synergies outlined in the reorganization plan.