Strategic reasons for merger

Tata chemicals is used to source, package, market distribute, and sell products of vacuum-
evaporated edible common salt, spices, protein foods, etc along with the chemicals business.
These are the most interesting business consumer products of Tata.

Soo, the growth of Tata chemicals was muted because of not being in the right location, and
also because of some management-related issues.

Tata Global Beverages which was also a consumer-oriented brand also had a revenue focus of
the company, much of it in its tea business. If there is a saturation in a particular business or
there is a change in consumer preferences, then it becomes a very risky situation for the
company.

Under Tata’s corporate restructuring, they planned to demerge the consumer-related business
from their chemical business, and mi=erge the specialty consumer business segment with Tata
Global Beverages. Currently Tata Global Beverages is known as Tata consumer Products
LImited (TCPL). To put it short the scattered business which Tata had has been synergised and
put together into one business domain. In addition Tata through its subsidiary Tata Digital
acquired a majority stake in BigBasket.

BigBasket gives the company direct access to vast data and an external distribution network.

After this, Bisleri will get a boost in its existing distribution and also get data driven support from
BigBasket, making the company’s existing supply chain more robust and efficient.

For TCPL, this deal will propel them to a market-leading position in the packaged drinking water
business, which they already sell , and Tata Copper Plus water under the HImalayan brand.
How is it going to affect the acquired
company?
If the deal goes through, the current management will be involved in operations & management
of Bisleri for 2 years as part of a hand booking process.

Where they came from?

Bisleri was originally an Italian brand created by Felice Bisleri as an alcohol remedy drink.

In 1965, Italian doctor Cesari Rossi and Indian businessman Khushroo Suntook introduced
Bisleri bottled water in India by setting up a factory in Thane. It was initially sold only in luxury
hotels and restaurants in Mumbai in glass bottles in two varieties – bubbly and still. In 1969, the
Jayantilal Chauhan family of Parle Group acquired the struggling Bisleri brand, which was
looking to exit the Indian market, for ₹4 lakh (about US$50,000)

Bisleri - Wikipedia

Why is Bisleri being sold to Tata?

Firstly, the reason Bisleri sold to TATA is due to the lack of succession to Mr. Chauhan after her
daughter refused to carry forward her father’s business.

Secondly, due to Mr. Chauhan’s failing health he wants to sell off the company to Tata
Consumer Products. He said that parting with Bisleri is a painful decision but believes that Tatas
would take great care of it. As he has no intention of running the company, Chauhan said that
he would not keep a minority stake but would rather invest in environmental and charitable
causes.

Bought for Rs 4 lakh, sold for Rs 7,000 crore! Bisleri in 1969 and Bisleri in 2022 -
BusinessToday
How have they valued the company?
As per the estimate of ICICI securities, in the financial year 2023, their revenues will be Rs.
13951 crores, and the profit after tax (PAT) 1143 crores.

If the deal goes ahead, Bisleri in the Tata consumer Products business will grow its revenue by
about 18% and PAT by 19% on an annual basis. So, Bisleri international is prices between
Rs.6000-7000 crores with price/sales at 2.5 and price/earning ratio at 27.2

Keeping the valuation aside, what mattered the most to Mr. chauhan is tata’s culture