The share price of Tata Global Beverage hit a new high of Rs 351.40, up nearly 3 percent, intraday on January 13 after the National Company Law Tribunal (NCLT) approved the demerger of consumer products business of Tata Chemicals and vesting it with the company.
The consumer products business will be transferred to Tata Global, which is into marketing, distribution and sales of tea, coffee and water.
The stock has rallied 21 percent in the last three months. It was quoting at Rs 348.45, up Rs 7.15, or 2.09 percent, on the BSE at 1102 hours. Tata Chemicals was trading at Rs 700.75, up Rs 11.10, or 1.61 percent.
Tata Chemicals (demerged company) is one of the key participants in the foods category, selling products under iconic brands such as Tata Salt and Tata Sampann among others.
A big player in the beverages category, Tata Global (resulting company) sells products under well-known names such as Tata Tea and Tetley.
Tata Global said the demerger of consumer products business will enable the company to expand its presence in the fast-moving consumer goods categories in India and abroad.
The demerger would result in revenue and cost synergies, including from supply chain opportunities, operational improvements, logistics alignment leading to economies of scale, creation of efficiencies and optimization of capital and operational expenditure, the company said.
"The shareholders of the demerged company will continue to participate in the growth of a larger consumer focused company i.e. the resulting company, while continuing to own shares in the demerged company which will remain focused on its basic chemistry and specialty products businesses," it added.
Tata Global said its subsidiary in UK, Tata Global Beverages Overseas Holdings, entered into an agreement to selling its entire equity shareholding in Tata Global Beverages Czech Republic a.s., the step-down subsidiary in Czech Republic.
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