After weeks of speculation, UK ingredients company Tate & Lyle has been bought by Ingredion, a US rival.
The £2.7bn (€3.1bn) deal adds significant heft to Ingredion’s portfolio of ingredients. According to Ingredion, the total enterprise value of the transaction would be £3.7bn (€4.3bn).
Under the deal, Tate & Lyle shareholders will be entitled to receive 595 pence per share, along with dividends of 20p per share.
Only two weeks ago, the companies confirmed that they were in talks, causing Tate & Lyle’s share price to shoot up by 45%. Now that the deal has been confirmed, it has been greeted with another share price spike.
The combined company comprised of Ingredion and Tate & Lyle could make up around 15% of the world’s alternative sweeteners market, according to market research firm Kline and Company.
The deal would, according to Ingredion, combine its own capabilities in texture and sugar reduction with Tate & Lyle’s in mouthfeel, sweetening and fortification.
“Combining Ingredion and Tate & Lyle’s complementary portfolios establishes a global leader in ingredient solutions with the innovation expertise and geographic reach that will help create the future of food,” says Jim Zallie, chairman, president and CEO of Ingredion.
“The combined business will be better positioned to serve customers’ needs for the development of great-tasting, healthier and affordable food products that consumers demand. This compelling combination will create exciting new possibilities for employees and generate significant value for all stakeholders.”
“Looking forward, 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,” adds David Hearn, chair of Tate & Lyle.
