The closely held Tata Industries is set to transfer its ready-to-eat meal business (sold under Tata Q brand) to the publicly listed Tata Consumer Products, according to people familiar with the matter. The move comes as India’s biggest conglomerate reorganises its corporate structure.
This would be the second such transaction between two Tata entities in the branded foods sector, underpinning group chairman N Chandrasekaran’s resolve to simplify the $103-billion conglomerate with a sharper focus on businesses that have a play in similar categories. Earlier, Tata Chemicals transferred its food portfolio consisting of Tata Salt and Tata Sampann pulses to Tata Consumer.
Tata Industries and Tata Consumer didn’t immediately reply to emailed queries. Tata Consumer houses the conglomerate’s food and beverage business that includes Tetley Tea, Eight O’Clock Coffee, Himalayan water and Starbucks and will now add ready-to-eat meals to its portfolio. Stock of the company ended nearly 2% down at Rs 827 apiece by close of Wednesday’s trade on the BSE, giving it a valuation of Rs 76,240 crore. Tata Consumer is the fifth-most valuable company among the group’s listed entities after TCS, Titan, Tata Motors and Tata Steel.
Tata Industries is best known for incubating new ventures for the conglomerate and it currently runs e-commerce (Tata Cliq), health services (Tata Health app) and digital classroom content (Tata ClassEdge) businesses. In the past too, it had transferred certain businesses to sister companies to facilitate consolidation. For instance, the defence unit.
Chandrasekaran has been ramping up efforts to streamline corporate structure across businesses through transfers, mergers and other programmes. At Tata Steel, the chairman rationalised around 100 entities in the last two years even as he advances the merger of Bhushan Steel (acquired through the bankruptcy process) with the company. The corporate structure simplification move helps the group to reduce legal costs, leverage synergies and scale up operations.
Source: Times of India
