Tata Coffee's, Tata Consumer Products: These Two Tata Companies Will Merge On Jan 1, 2024; Check Record Date

Two Tata group companies - Tata Consumer Products Ltd (TCPL) and Tata Coffee Ltd (TCL) are also set to merge effective from the new year January 1, 2023. Shares of these two Tata group stocks surged on Friday, a day after Tata Consumer Products announced January 1, 2024, as the appointed date of the merger of Tata Coffee in an exchange filing on Thursday.

On Friday, the share price of Tata Consumer Products traded at a new 52-week high value of 1078.20. At 9:56 am IST, Tata Consumer Products shares were up 3.03% at Rs 1073.65 per share. The stock has a 52 Wk High and 52 Wk low of 1,078.20 and 685.00 respectively. Meanwhile, Tata Coffee shares also traded at a new 52-week-high value of 321.15 in the early morning trade on Friday. At 9:58 am IST, the share price of Tata Coffee Ltd was up 3.65% at Rs 319.40 per share.

On Thursday, TCPL issued an update in reference to the Composite Scheme of Arrangement amongst Tata Consumer Products Limited ("TCPL"), Tata Coffee Limited ("TCL"), and TCPL Beverages & Foods Limited ("TBFL") and announced January 01, 2024, as the appointed Date and the Effective Date of the Scheme are January 01, 2024.

Record Date:

Meanwhile, the Record Date, to determine the shareholders of TCL to whom equity shares of TCPL would be allotted pursuant to the Demerger and the Amalgamation has been set as January 15, 2024.

"Record Date, to determine the shareholders of TCL to whom equity shares of TCPL would be allotted under the Demerger and the Amalgamation in accordance with Clause 13.1 and Clause 20.1, respectively, is Monday, January 15, 2024," said the company on Thursday.

The merger announcement date comes nearly two years after Tata Consumer first announced the merger of all businesses of Tata Coffee with itself. This was part of a reorganization plan aligning with the company's strategic priority of unlocking synergies and efficiencies.

What does the merger mean to TCPL and TCL shareholders?

Tata Coffee's proposed merger with parent company Tata Consumer Products Ltd (TCPL) will come into effect from January 1. Simultaneously, Tata Coffee's plantation unit will be demerged and amalgamated into another Tata group unit TCPL Beverages & Foods, the company said on December 28.

In a corporate filing, Tata Coffee said, "With the Scheme becoming effective on January 1, 2024, the Company will get dissolved without winding-up, and accordingly the office of all Directors and Key Managerial Personnel of the Company shall stand vacated on that date, without further course of action."

As per the filing, the plantation business of Tata Coffee Ltd will be demerged into TCPL Beverages & Foods, and the remaining business of TCL, consisting of its extraction and branded coffee business, will be merged with TCPL.

Shareholders of Tata Consumer Products, Tata Coffee, and TCPL Beverages and Foods approved a restructuring proposal during a vote conducted in 2022. TCPL shall issue and allot equity shares in two tranches; a). as per the share entitlement ratio of 1:22 for consideration of demerger, b) as per share exchange ratio of 14:55 for consideration of amalgamation

Thus, under the scheme of the arrangement, existing shareholders will be issued one equity share for every 22 equity shares held in Tata Coffee by TCPL, as part of the reorganization scheme.
Last month, the Kolkata bench of the National Company Law Tribunal (NCLT) approved the merger of TCL with TCPL and a fully-owned subsidiary called TCPL Beverages & Foods (TBFL).