Tata Global Beverages and Tata Chemicals shares jumped on Thursday, a day after the announcement of transfer of the chemicals company's consumer business into the tea and coffee manufacturer Tata Global Beverages.
Tata Chemicals shares surged as much as 8.36 per cent while Tata Global Beverages stock jumped as much as 10.62 per cent in intraday trade.
Tata Global Beverages and Tata Chemicals board of directors in separate meetings approved de-merger of Tata Chemicals' consumer products business into Tata Global Beverages.Tata Global Beverages said the move is aimed at integrating the consumer products business activities undertaken by both under a single entity.
The move would create Tata Consumer Products Ltd with a combined turnover of over Rs 9,099 crore.Tata Chemicals shareholders will each get 1.14 new equity shares of Tata Global Beverages for every one equity share held.
Tata Chemicals shareholders will retain their ownership of a focused science-led chemistry solutions and specialty products company, according to Tata Global Beverages.The turnover of Tata Chemicals' consumer products business stood at Rs 1,847 crore as of March 31, 2019, contributing 16 per cent to the consolidated revenue of the company, the filing noted.Tata Chemicals' consumer business includes sourcing, packaging, marketing, distribution and sales of vacuum evaporated edible common salt for human consumption, spices, protein foods and certain other food and other products, the company said.Its salt manufacturing facility, basic chemistry products and specialty products business will not be transferred to the resulting company, and will continue to be owned by Tata Chemicals, Tata Global Beverages noted.Tata Chemicals will focus on its core chemicals business after this deal.At 11:49 am, Tata Global Beverages shares traded 7.17 per cent higher at Rs 213.00 apiece on the BSE, and Tata Chemicals stock was up 7.19 per cent at Rs 597.45, both outperforming the benchmark Sensex index which was flat at the time.(With inputs from Press Trust of India)Get the latest election news, live updates and election schedule for Lok Sabha Elections 2019 on TheIndianSubcontinent.com/elections.
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