Tate & Lyle takes major step to focus business through sale of EU Sugar operations

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Tate & Lyle PLC (“Tate & Lyle”) announces today it has signed an agreement for the sale of its EU Sugar Refining operations (“EUS”) to American Sugar Refining, Inc.  The consideration is £211 million payable in cash, subject to closing adjustments for net cash and working capital, with the proceeds used to reduce Tate & Lyle’s net debt1

On 27 May 2010, Tate & Lyle announced its clear intentions to focus, fix and grow its business.  Today’s announcement is fully consistent with those intentions and will result in a more focused, less volatile business, and a solid platform to deliver sustainable long-term growth in Speciality Food Ingredients, supported by cash generated from Bulk Ingredients.

EUS consists of the cane sugar refineries in London, UK, and Lisbon, Portugal, the Lyle’s Golden Syrup factory in London, UK, the associated sugar and syrup brands and the Tate & Lyle Process Technology consulting business. In the year ended 31 March 2010, these businesses had external sales of £689 million and made an adjusted2 operating profit of £14 million (after transitional aid of £17 million), and had gross assets of £374 million at 31 March 2010. The sale excludes historic UK pension assets and liabilities and is expected to give rise to a book loss on disposal, before costs, of approximately £55 million, subject to exchange rate movements and the timing of completion. The transaction is expected to be neutral to the Group’s adjusted earnings per share on total operations in the 2011 financial year.

The completion of the transaction, which is conditional upon anti-trust clearance in Portugal, is expected to occur in approximately two months. Payment of £5 million of the consideration is contingent on the transfer of certain joint venture shareholdings that are subject to pre-emption rights held by the other shareholders.

Tate & Lyle has provided American Sugar Refining, Inc. with a perpetual worldwide licence to use the Tate & Lyle brand in connection with the retail sale of sugar and in other limited circumstances.

Tate & Lyle also announces the launch of processes to sell the remaining businesses within the Sugars division, principally Molasses and Vietnamese sugar. 

The Sugars division will be classified as discontinued in the Interim Results to 30 September 2010.

Javed Ahmed, Chief Executive of Tate & Lyle said:

“Sugar refining has enjoyed a long and proud history within Tate & Lyle, but we believe the interests of this business and its employees are now best served by being part of a company for whom sugar refining is core. I sincerely thank our employees for their hard work and commitment over the years, and wish them every success in the future.

“Tate & Lyle’s clear priority is to grow its Speciality Food Ingredients business, supported by cash generated from Bulk Ingredients.  This disposal will enable us to concentrate our resources on delivering our strategic objectives as we focus, fix and grow our business.”

Note 1    Net debt at 31 March 2010 was £814 million.

Note 2    Excluding exceptional items and amortisation of acquired intangibles.

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About Tate & Lyle: 
Tate & Lyle PLC is a leading global provider of food and beverage ingredients and solutions. Supported by our 160-year history of ingredient innovation, we partner with customers to provide consumers with healthier and tastier choices when they eat and drink. We are proud that millions of people around the world consume products containing our ingredients every day.

Through our expertise in sweetening, mouthfeel and fibre fortification, our Food & Beverage Solutions business develops solutions which reduce sugar, calories and fat, add fibre, and provide texture and stability in categories including beverages, dairy, bakery, soups, sauces and dressings. Our Primary Products business produces nutritive sweeteners, industrial starches used in paper and packaging, acidulants and products used for animal nutrition.

We have around 4,200 employees working in more than 60 locations across 30 countries. Tate & Lyle’s purpose is Improving Lives for Generations and through our purpose we believe we can successfully grow our business and have a positive impact on society. We live our purpose in three ways, by supporting healthy living, building thriving communities and caring for our planet.

Tate & Lyle is listed on the London Stock Exchange under the symbol TATE.L. American Depositary Receipts trade under TATYY. In the year to 31 March 2020, Tate & Lyle sales totalled £2.9 billion. For more information, please visit http://www.tateandlyle.com or follow Tate & Lyle on TwitterLinkedin or Facebook.