Tate & Lyle is to sell its sugar refining operations to American Sugar Refining for £211m in cash, with the proceeds used to reduce the company’s debt.
These businesses consist of 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 £689m, made an operating profit of £14m and had gross assets of £374m.
The sale excludes historic UK pension assets and liabilities and 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.
Tate & Lyle has provided American Sugar Refining with a perpetual worldwide licence to use the Tate & Lyle brand in connection with the retail sale of sugar and in other limited circumstances.
The company also plans to sell its remaining businesses within its Sugars division, principally Molasses and Vietnamese sugar.
Javed Ahmed, chief executive of Tate & Lyle, said: ’Tate & Lyle’s priority is to grow its speciality food ingredients business, supported by cash generated from [our] bulk ingredients [business].’