Tata Coffee Shares Rally On Merger With Tata Consumer Products

Shares of India's Tata Coffee Ltd surged up to 12% on Wednesday after parent Tata Consumer Products Ltd said it would streamline its coffee business by merging the company with itself.

Tata Consumer said the plantation business of Tata Coffee would be demerged into Tata Consumer Products' beverages and foods unit, which is known for brands like "Tata Tea" and "Tetley".

The remaining business of Tata Coffee, which houses extraction and coffee brands, would combine with Tata Consumer.

Analysts at Nomura said they believed the merger would add to Tata Consumer's earnings by 3%-4%, while also improving the company's supply chain.

Tata Coffee, which makes instant coffee, pepper and tea, was up 10.5% at Rs 216.90, as of 9:32 am, while Tata Consumer climbed 4.7%.