Simplification, synergy and scale. These three words describe the game plan that Tata Sons chairman N Chandrasekaran has for the group. However, it is easier said than done when the scale is the entire Tata Group with 28 publically listed companies.

N Chandrasekaran has already consolidated the defence and aerospace business into Tata Aerospace and Defence. It's now set for a bigger task- consolidating its consumer footprint.

CNBC-TV18 has learned from sources that Tata Group is set to merge Tata Chemicals consumer business with Tata Global Beverages, and both the companies will be meeting tomorrow to consider and approve the transfer.

In March 2017, CNBC-TV18 had first reported that Tata Group was in exploratory talks to merge the consumer businesses of both the companies. CNBC-TV18 was also the first to report in March 2019 that Tata Chemicals consumer business would be merged with Tata Global Beverages.

Merger and Rebranding

Tata Chemicals has consumer businesses across branded salt, pulses, spices, ready to eat snacks. According to sources privy to the developments told CNBC-TV18 that the entire portfolio will be transferred to Tata Global Beverages and the merged entity will be rebranded under a new identity.

The two flagship products of Tata Chemicals, Tata Salt and Tata Sampann, have contributed 16 percent and 19 percent of FY19 revenue for Tata Chemicals.

According to multiple people familiar with the development, the salt business will continue to be manufactured by Tata Chemicals as it is a key part of the production of Soda Ash. Also, Tata Chemicals will produce salt and supply to Tata Global Beverages.

Further, Tata Chemicals will then focus entirely on the chemical and speciality product business and investments can be directed solely into growing the business organically and inorganically. What is unclear is the financial consideration that Tata Chemicals will get post the transfer of the consumer business.

CNBC-TV18 learned that for the new consumer entity, there will be operational, supply chain and distribution synergies which, the group believes, will maximise profits and also lead to eventual cost savings. When contacted, a Tata Group spokesperson said, "We do not comment on speculation."

First Published:May 14, 2019 9:54 PM IST