Tate & Lyle to be acquired by Ingredion in £2.7bn deal

(Sharecast News) - Tate & Lyle has agreed to be taken over by US peer Ingredion in a £2.7bn deal, it was confirmed on Monday. The British ingredients firm, which was founded in 1859, is being acquired for 595p per share in cash and dividends of up to 20p share. It values the business at £2.7bn, with an implied enterprise value of £3.7bn, and represents a 58.7% premium to the closing share price on 13 May, the last day of trading before the takeover talks were first disclosed.

Splenda-owner Tate & Lyle said the deal would create a business with "even greater potential".

David Hearn, chair, said: "Over the last few years, Tate & Lyle has been successfully repositioned as a leading global speciality food and beverage solutions business aligned to growing consumer demand for healthier, more nutritious and sustainable food and drink.

"We believe the next chapter with Ingredion will create a business with even greater potential, greater scale and increased investment in innovation in support of customers."

Jim Zallie, chief executive of Ingredion, said the tie-up would generate "significant value for all stakeholders", adding: "Combining Ingredion and Tate & Lyle's complementary portfolios creates a global leader in ingredient solutions with the expertise and geographic reach to help shape the future of food."

Tate & Lyle started as a Liverpool-based sugar refiner and went onto become a global leader. However, it sold its sugar business - including Lyle's Golden Syrup - well over a decade ago and now focuses on sweetening, mouthfeel and fortification ingredients and solutions.

The companies acknowledged that despite "strong, fundamental long-term growth drivers" for the sector, the operating environment for ingredients companies had deteriorated over the last year, "with consumer sentiment weakening across all major regions".

Tate & Lyle is one of the longest members of the London Stock Exchange, joining in 1935 as one of the original founder constituents of the FT-30.

The sale to Ingredion, which will be implemented by a scheme of arrangement, still requires shareholder approval.

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