Tata Consumer Products Ltd. has announced its intention to merge three of its wholly-owned subsidiaries, NourishCo Beverages, Tata SmartFoodz, and Tata Consumer Soulfull. The objective behind this move is to enhance the efficient use of resources and streamline compliance requirements. The board of Tata Consumer Products’ FMCG division has given its approval for the Amalgamation Scheme, as revealed by the company.
As per the announcement, the date for this merger is scheduled for April 1, 2024. TCPL, serving as the receiving company, had previously acquired and held all the equity shares issued by the subsidiary companies.
By the process outlined in the agreement dated February 2, 2021, TCPL has also acquired all optionally convertible preference shares of Tata Consumer Soulfull Private Limited (previously known as Kottaram Agro Foods Private Limited) from its former promoters. As a result, it now owns the entire share capital of all three subsidiary companies, including Tata Consumer Soulfull Private Limited. Since TCPL is the parent company holding all shares in the share capital of the subsidiary companies, there will be no issuance of new shares by them as part of the consolidation.
The consolidation of these businesses is aimed at optimizing the utilization of their resources, cutting down on overheads, reducing costs, and achieving economies of scale. Additionally, it will eliminate redundant tasks and simplify compliance requirements, resulting in a more efficient operation.
Tata Consumer Products Limited (TCPL) emphasized that this scheme is designed to benefit not only the transferring companies but also the receiving company. It is expected to yield positive outcomes for shareholders, creditors, employees, and all stakeholders involved. TCPL, previously known as Tata Global Beverages Ltd., is enthusiastic about the advantages this merger will bring to various parties.
Since there are internal transfers between the companies within the group, this merger will not involve any exchange of cash or shares. It’s important to note that all the subsidiary companies are fully owned by TCPL. It also mentioned that the implementation of the scheme is contingent on obtaining the required legal and regulatory approvals, including approval from the National Company Law Tribunal.
According to TCPL, the transferor companies were previously acquired by the transferee company from their original promoters, and they are now wholly-owned subsidiaries of the transferee company. TCPL believes that combining and conducting the businesses of the transferor companies alongside the business of the transferee company would be more convenient and advantageous.
Tata SmartFoodz achieved a turnover of Rs 15.71 crore for the fiscal year ending on March 31, 2023. The company specializes in the production, distribution, and sale of ready-to-eat ethnic and international food products, as well as ready-to-cook gravies and pastes under well-recognized brand names like ‘Tata Sampann Yumside’ and ‘Tata Raasa.’
In its recent report on Tuesday, TCPL disclosed a substantial 36.4 per cent increase in consolidated profit before exceptional items and tax, reaching Rs 505.43 crore. Furthermore, the company’s revenue from operations witnessed an impressive 11 per cent growth, totalling Rs 3,733.78 crore.