OREANDA-NEWS. The boards of directors of Tata Global Beverages (TGBL) and Mount Everest Mineral Water (MEMW), in their respective meetings today, approved a proposal to merge MEMW with TGBL.

MEMW is a subsidiary of TGBL and TBGL presently holds 50.07 percent stake in MEMW.

The exchange ratio recommended by the valuers and approved by both the boards is three shares of TGBL (face value of Rs1 each) for every four shares of MEMW (face value of Rs10 each).

Merger benefits and synergies

This merger will enable increased operational efficiencies and better synergy between both businesses. With TGBL's focus on the natural beverages business which includes water, the proposed merger will facilitate the growth of the Himalayan natural mineral water brand owned by MEMW. Himalayan water will have the benefit of TGBL's resources in India as well as other global markets, which will help unlock the power of this brand. The merger will help increase long-term value for shareholders and for investors.

Key regulatory approvals

According to the merger scheme approved by both the boards, the merger is proposed to be undertaken through a court-approved scheme of amalgamation pursuant to sections 391 to 394 of the Companies Act, 1956. The scheme of amalgamation will be subject to various statutory / regulatory approvals, including approval of shareholders and sanction by the High Court at Calcutta and the High Court of Himachal Pradesh at Shimla.