12th Jul 2021 10:36
(Alliance News) - Tate & Lyle PLC will sell a controlling stake in its North American sweeteners division for USD1.3 billion as food ingredients company focuses on healthier products, it announced on Monday.
Tate & Lyle has agreed to sell a controlling stake in a new company and its subsidiaries, comprising its Primary Products business in North America and Latin America and its interests in the Almidones Mexicanos SA de CV and DuPont Tate & Lyle Bio-Products Co LLC joint ventures.
The assets will be sold to KPS Capital Partners LP. Tate & Lyle said it expects to receive gross cash proceeds of USD1.3 billion, resulting in net cash proceeds of USD1.2 billion after adjustments and transaction costs.
Following completion, the company said it intends to return GBP500 million to Tate & Lyle's shareholders through a special dividend and associated share consolidation. Completion is expected in the first quarter of 2022.
Tate & Lyle and KPS each will own 50% of new company - valued at around USD1.7 billion - with KPS having board and operational control.
Tate & Lyle, which started life as a sugar company, now hopes to benefit from what it describes as growing global consumer demand for healthier food and drinks, which has been accelerated by the global pandemic.
"The proposed transaction represents an ambitious and bold step forward for Tate & Lyle. Driven by our purpose, all our people, expertise and investment will be dedicated to growing our global food and beverage solutions business and creating healthier food and drink," commented Chief Executive Nick Hampton.
Tate & Lyle shares were up 1.3% at 772.00 pence on Monday morning in London.
By Will Paige; [email protected]
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