The merger of Tata Coffee and Tata Consumer Products is set to take effect starting January 1.

The implementation of the scheme of arrangement between Tata Coffee Ltd (TCL), Tata Consumer Products Ltd (TCPL), and its wholly owned subsidiary TCPL Beverages and Foods Ltd (TBFL) is scheduled to commence on January 1, 2024, according to an official statement by Tata Coffee.

This strategic arrangement involves a two-fold process. Firstly, it encompasses the demerger of Tata Coffee's plantation business, which will be transferred to TCPL Beverages and Foods. The second phase involves the merger of the remaining business of Tata Coffee with Tata Consumer Products. The fulfillment of conditions under Clause 29 of the scheme has been acknowledged by the board of directors of TCL, the scheme implementation committee of the board of TCPL, and the board of directors of TBFL, as per the disclosure made in the exchange filing on Thursday.

The stipulated dates for the scheme, namely the appointed date and the effective date, are both slated for January 1, 2024, as indicated in the statement. Furthermore, the Tata company board is set to determine the allotment of TCPL shares to Tata Coffee shareholders on January 15, 2024.

Approval for the scheme of arrangement among TCL, TBFL, and TCPL was granted by the National Company Law Tribunal on December 1. The reorganization plan, initially announced in March 2022, aligns with the company's overarching objective of unlocking synergies and operational efficiencies.

Following this announcement, TCPL outlined the specifics of the share issuance for the demerger and merger components. Notably, for the demerger of TCL's plantation business into TCPL, shareholders will receive one equity share for every 22 equity shares held in TCL. In the case of the merger of the remaining business, TCPL will issue 14 equity shares for every 55 equity shares held in TCL.

Upon the successful completion of the demerger and amalgamation, TCL will be dissolved, and shareholders of TCL will receive three new equity shares of TCPL for every 10 equity shares of TCL.