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**Associated British Foods plc (ABF), the international food, ingredients and retail group, has reached an agreement with Ebro Puleva SA to acquire its Spanish sugar business, Azucarera Ebro SL, for a value of €385m.

**Completion of the transaction is subject to regulatory approval and is likely to occur in early 2009.

Azucarera Ebro had revenue of €586m and operating profit of €44m for the year ended 31 December 2007. It is the leading sugar producer in Iberia, supplying 50% of the 1.6 million tons of sugar consumed.

British Sugar is the second largest sugar producer in the world, with production last year of 3.9 million tons. It has extensive operations in the UK, Poland, China and Southern Africa.

It also has proven expertise in improving agricultural productivity and processing efficiencies, and in the development of sugar products for the industrial and retail sectors, and valuable co-products.

It is expected that Azucarera Ebro will benefit from British Sugar’s expertise in improving processing efficiencies and the development of co-products.