Tata Coffee Ready to be Merged with Tata Consumers

Tata Coffee is all set to be merged with Tata consumer’s products. The Tata Group's second significant restructure of its foods and drinks business in recent years.
Tata Coffee Ready to be Merged with Tata Consumers
Tata Coffee

Tata Coffee is all set to be merged with Tata consumer’s products. The Tata Group's second significant restructure of its foods and drinks business in recent years. Aside from that, the latter would invest Rs 571 crore to boost its shareholding in its UK affiliate from 90 percent to 100 percent. Previously, the group integrated Tata Chemicals' salt and branded lentils businesses with Tata Consumer.

Tata Coffee Controlled by Tata Consumer, Owns 57% of the Company

Tata Coffee Controlled by Tata Consumer

The transaction's features involve the group initially detaching the plantation's business from Tata Coffee and relocating it to a wholly-owned subsidiary of Tata Consumer. It will then integrate Tata Coffee's residual business, which includes branded coffee and ownership of the American brand Eight 0'clock, with Tata Consumer. Tata Consumer controls 57% of Tata Coffee, while the public owns the remaining 43%. In exchange for the demerger and amalgamation, the group would issue three equity shares of Tata Consumer to Tata Coffee's public shareholders for every ten shares held. Following the share allotment, the public ownership in Tata Consumer will increase from 65 % to 66%.

Tata Coffee's Standalone Turnover of Rs 737 Crore

Tata Coffee's Standalone Turnover

In fiscal 2021, the plantations business, which comprises 18 coffee and pepper farms as well as the roast and ground coffee factory in Kushalnagar, Karnataka, generated a turnover of Rs 376 crore. During the same year, the turnover constituted 51% of Tata Coffee's standalone turnover of Rs 737 crore. The plantations division will be moved to TCPL Foods and Beverages, which was formed in February of this year. Tata Consumer would invest around Rs 8 crore in this startup, the company announced on Tuesday. For some years, there has been speculation regarding the firm integrating the coffee business with Tata Consumer.

Tata Consumer Products to be Issued Shares Tata Enterprises

Tata Consumer said it will issue Rs 571 crore in shares to Tata Enterprises (Overseas) to buy off its 10% shareholding in Tata Consumer Products UK Group. After the share-allotment, Tata Enterprises, which is the majority held by the Jamshetji Foundation, a recognized NGO in Switzerland, would own 0.80 percent of Tata Consumer.

Tata Consumer UK, with sales of 228 million pounds (Rs 2,261 crore) in fiscal 2021, sells Tetley and other tea brands in the United Kingdom. In addition, it has subsidiaries in the United States, Canada, Poland, and Australia, as well as joint ventures in South Africa and Bangladesh.

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