Sugar producer Tate & Lyle has announces that it has completed the transaction to realign its Eaststarch corn wet milling joint venture in Europe with Archer Daniels Midland.
The signing of the agreement to re-align Eaststarch was announced on 21 April 2015 and the move has now been finalised.
Following completion, Tate & Lyle has acquired full ownership of the more speciality-focussed plant in Slovakia and exited the predominantly bulk ingredients plants in Bulgaria, Turkey and Hungary. Tate & Lyle has also received the cash consideration of €240m, the company revealed. Customary working capital adjustments will be made in due course, it added.
At the time that the deal was agreed, Tate & Lyle said that the acquisition of the Slovakia facility would strengthen its speciality food ingredients business, while its departure from the three bulk ingredients plants in Europe would “substantially reduce its European bulk ingredients footprint”.
As a result of the re-alignment, Tate & Lyle will substantially exit from bulk sweeteners in Europe for good value and before a decision on potential future capital investment is required arising from the reform of the EU Sugar Regime in 2017. The proportion of group adjusted operating profit from speciality food ingredients will increase from 50% to around 55%, and in Europe will effectively become all of the profit.
Tate & Lyle chief executive Javed Ahmed said: “By re-aligning the Eaststarch joint venture we will focus in Europe on Speciality Food Ingredients, and our Bulk Ingredients will become a predominantly North American business with strong market positions and efficient, scale assets.”
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