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Tata Chemicals & TGBL to come under new company Tata Consumer Products
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Thursday, 16 May, 2019, 13 : 00 PM [IST]
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Our Bureau, Bengaluru
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Tata Chemicals’ (TCL) consumer product business will now be a part of Tata Global Beverages Limited (TGBL) and will come under a new company, Tata Consumer Products.
The board of directors of the two companies: TCL and TGBL have approved the de-merger of the consumer products business of the former into the latter through a National Company Law Tribunal- (NCLT) permitted scheme of arrangement.
The proposed transaction will create a focussed consumer products company with a combined turnover and EBITDA (earnings before interest, taxation, depreciation and amortisation) of Rs 9,099 crore and Rs 1,154 crore respectively, for the 12-month period ended March 31, 2019 on a proforma basis.
The combination of the two consumer-focussed 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 and beverages market with a broader exposure to the attractive and fast-growing FMCG sector.
TCL shareholders will retain their ownership of a focussed 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 move will also benefit 200 million households with a broader portfolio, distribution and 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.
“Tata Consumer Products consolidates our current presence in food and 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,” stated N Chandrasekaran, chairman, Tata Sons.
“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 will increase 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,” said Ajoy Misra, managing director and chief executive officer, TGBL.
R Mukundan, managing director and chief executive officer, 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.”
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