A series of open market share deals from February this year among Tata Group holding company Tata Sons and its three beverages companies ? Tata Global Beverages, Tata Coffee and Mount Everest Mineral Water ? signals a possible consolidation of all beverages makers under Tata Global Beverages to create one of the largest non-carbonated beverages company.

First of the share deals on February 21 removed the crossholding between Tata Coffee and Tata Global Beverages. Tata Coffee sold 982,500 shares it owned in Tata Global Beverages to Tata Sons for R11.71 crore at R119.2 a piece. Six days later, another 10 lakh shares were sold to the holding company for R11.25 crore at R112.5 a piece.

Tata Coffee sold its shares to parent Tata Sons despite its majority share of 57.48% owned by Tata Global.

In a related development, Tata Global Beverages advanced its option by an year to purchase a part of the stake it did not own in Himalaya mineral water maker Mount Everest Water from its original promoters.

On March 27, Tata Global Beverages, which owns 50.04% stake in Mount Everest Water purchased 1,417,632 shares or 4.17% stake from Foresight Holdings and Vinod Sethi for R28.07 crore at R198 a piece.

?Tata Global has accelerated the share purchase by a year this may be a prelude to merging all the three companies,? a person familiar with the development said. ?The put option was due in 2013.?

Tata Global plans to purchase the last tranche of shares below 5% by April 2012 to adhere to the Securities Exchange Board of India?s (Sebi) creeping acquisition law. Under the Sebi law, promoters can buy up to 5% stake in their company in an year until their stakes reaches 75%.

The Mount Everest Mineral Water board approved to exercise its option to purchase the remaining stake in fiscal 2013 and reduce the interest rate paid to the sellers every year by 3% to 7% from earlier 10%.

?We do not comment on market speculation,? Tata Global Beverages public relation agency said in an e-mail response.

?A merged company will give Tata Global Beverages benefit of scale and an opportunity to use the global network to market its premium Himalaya brand mineral water across the globe,? said an analyst with a foreign brokerage.

Tata Global Beverages has signed two joint agreements ? an equal venture with Starbucks Coffee to own and operate Starbucks caf?s, which will be branded as Starbucks Coffee ?A Tata Alliance?.

The venture plans to open retail stores across the country first in Delhi and Mumbai in calendar 2012. The venture will also enable it to expand its range of offerings by leveraging assets and innovation to offer premium tea brand Tata Tazo.

Tata Global?s subsidiary Tata Coffee has also signed a sourcing agreement with Tata Starbucks to supply roasted coffee and to export it to parent Starbucks Coffee Company. Starbucks will also offer Himalaya water in its 17,000 retail outlet across the globe.

Tata Global also have a joint venture with PepsiCo, world?s third largest carbonated soft drink maker ? Nourish Co ?to sell health drinks.

?Tata Global can avail three benefits from a merger,? said Naimesh Dave, consultant at OC & C strategy, a consulting firm. ?One, it can gain synergy with single distribution network, two, it can expand product portfolio, and third, it van generate a greater clout with its channel partners.?

But, consultants say there are challenges, too. ?The type of reach for each product is different,? said a consultant from a global consulting firm.

?Tea is highly penetrated, coffee is niche and distribution system is different for water. But the company can save money from common sourcing of certain raw materials for packaging, attract talent with several brands under one roof in a bigger company and stay together in a go to market perspective,? the consultant added.