Tata Global Beverages and Tata Chemicals announce transaction to combine Consumer Businesses to create a focused Consumer Products Company
- Tata Global Beverages Limited to be renamed Tata Consumer Products Limited to reflect the new strategic direction of the Company
- Combined entity to reach over 200 million households, giving it an unparalleled ability to leverage the Tata brand in Consumer Products
- Combines key brands such as “Tata Salt”, “Tata Tea”, “Tata Sampann” and “Tetley” under a single umbrella
- Tata Chemicals to focus on innovative science-based chemistry solutions and products
- Significant value creation for all shareholders through greater scale and synergies
The Boards of Directors of Tata Global Beverages Limited (“TGBL”) and Tata Chemicals Limited (“TCL”), at their respective meetings held today, have approved the de-merger of the Consumer Products Business of TCL into TGBL through a National Company Law Tribunal (“NCLT”) approved scheme of arrangement (“Scheme”).
Pursuant to the Scheme, each shareholder of TCL will get 1.14 new equity shares of TGBL for every 1 equity share held in TCL i.e. a shareholder holding 100 shares in TCL will receive 114 shares in TGBL. The respective Boards have approved the Entitlement Ratio based on the recommendations of independent valuers.
The proposed transaction will create a focused Consumer Products Company with a combined turnover and EBITDA of Rs. 9,099 crore and Rs. 1,154 crore respectively, for the twelve months period ended March 31, 2019 on a proforma basis.
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 & beverages market with a broader exposure to the attractive and fast growing FMCG sector. TCL shareholders will retain their ownership of a focused science-led chemistry solutions and specialty products company with a leading portfolio of products in basic and specialty chemicals and strong cash flows to support future growth.
The combined consumer business will also benefit from a combined reach of over 200 million households, a broader portfolio to deepen distribution, enhanced innovation capabilities, as well as a strong product pipeline. In addition, the new consumer entity expects to achieve substantial revenue and cost synergies which will add value to its shareholders.
The transaction is subject to the necessary statutory and regulatory approvals including approvals of the respective benches of NCLT, the Stock Exchanges, SEBI and the respective shareholders and lenders/creditors of each of the companies. The transaction is expected to be completed by Q4 FY20 / Q1 FY21.
Commenting on the announcement, Mr. N Chandrasekaran, Chairman, Tata Sons said, “Tata Consumer Products consolidates our current presence in food & 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.”
Mr. Ajoy Misra, Managing Director & CEO of TGBL, added: “This transaction is consistent with our strategy to deepen our India presence and transform into a broader FMCG player. Existing TGBL shareholders will benefit significantly as the Consumer 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.”
Mr. R Mukundan, Managing Director and CEO of Tata Chemicals 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, Tata Chemicals will aggressively grow its Specialty Chemistry business in the areas of Agro-Science, Nutrition Science, Material Science and Energy Storage Science. 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.”
About Tata Global Beverages Limited:
Tata Global Beverages is a global beverage business; its brands have presence in over 40 countries. The Company has significant interests in tea, coffee and water and is the world’s second largest tea company. 330+ million servings of its brands are consumed everyday around the world. Tata Global Beverages Group has an annual turnover of approximately Rs.9,300cr including from its JV’s and associates; it employs around 3,000 people across the world. The company focuses on natural beverages and has a stable of innovative regional and global beverage brands, including: Tata Tea, Tetley, Himalayan natural mineral water, Tata Water Plus and Tata Gluco+, Good Earth tea, Grand Coffee and Eight O’clock coffee. For more information please visit www.tataglobalbeverages.com
About Tata Chemicals Limited:
Tata Chemicals Limited, is a global company with interests in businesses that focus on Basic Chemistry Products, Consumer and Specialty products. The story of the company is about harnessing the fruits of science for goals that go beyond business. Through its Consumer products portfolio the company has positively impacted the lives of millions of Indians. Tata Chemicals is the pioneer and market leader in India’s branded Iodised salt segment. Extending its portfolio from salt to other food essentials, TCL unveiled India’s first national brand of pulses, followed by a range of spices and nutrimixes. Tata Chemicals has been rated as one of the top 10% in Business and Consumer brands across all industry and consumer brand categories in India by Superbrands™.
The company’s Basic Chemistry product range provides key ingredients to some of the world’s largest manufacturers of g lass, detergents and other industrial products. Tata Chemicals currently is the world’s third largest producer of soda ash with manufacturing facilities in Asia, Europe, Africa and North America. With its Farming Essentials portfolio the company through its subsidiary Rallis, has a strong position in the crop protection business. The Tata Chemicals Innovation Centre is home to world class R&D capabilities in the emerging areas of food sciences, nanotechnology and biotechnology.
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