Tate & Lyle has agreed to a £2.7bn takeover by its US competitor Ingredion, a move that could jeopardize hundreds of jobs and marks another setback for London's struggling stock exchange.
Deal Details
The FTSE 250 company, known for producing artificial sweeteners like Splenda, has accepted an offer valuing it at 615p per share. This represents a premium of approximately 60% above its share price before takeover rumors surfaced. However, the firms have warned of a potential 'material reduction' in Tate & Lyle's workforce, amounting to 3% of the combined group's employees—roughly 475 positions.
In a joint statement, they said: 'Any such workforce reduction would be implemented with the aim of combining the strengths and capabilities of both businesses.'
Workforce Impact
Tate & Lyle, one of the UK's oldest listed companies, employs nearly 5,000 people globally. Around 200 of these are based in the UK, primarily at its London headquarters. Ingredion, headquartered in Chicago, Illinois, has about 11,000 employees worldwide.
Struggles and Strategic Shift
The takeover comes at a low point for Tate & Lyle, whose share price had more than halved over the past five years prior to the deal's announcement. The company, originally famous for its sugar products, sold its namesake sugar business to American Sugar Refining for £211m in 2010. It then pivoted to artificial sweeteners and specialty food ingredients, acquiring US-based CP Kelco—a leader in specialty gums and pectins—for $1.8bn in 2024.
Despite these moves, Tate & Lyle has struggled to impress investors, citing weak consumer demand even as GLP-1 weight-loss drugs gain popularity.
Combined Group Prospects
Ingredion stated that the combined entity would generate annual revenue of about $9.9bn (£7.4bn) and adjusted profits of $1.8bn. Following the announcement, Tate & Lyle shares rose 14% to 562p in early afternoon trading.
London Market Blow
This acquisition is yet another loss for the London Stock Exchange, which has seen a series of high-profile departures in recent years. Several London-listed firms have agreed to take-private deals in 2023 alone, including asset manager Schroders, insurer Beazley, and laboratory testing company Intertek.
Leadership Comments
Tate & Lyle chair David Hearn expressed optimism: 'Our next chapter with Ingredion will create a business with even greater potential, greater scale, and increased investment in innovation in support of customers.'
Jim Zallie, chair and CEO of Ingredion, added: 'Combining Ingredion and Tate & Lyle's complementary portfolios creates a global leader in ingredient solutions with the expertise and geographic reach to help shape the future of food.'
Historical Context
Tate & Lyle traces its roots to the late 1800s, when sugar refiners Henry Tate and Abram Lyle established rival operations in Liverpool and London. Tate introduced sugar cubes to the UK in 1875, while Lyle became renowned for producing golden syrup at his Thames-side refinery. The two companies merged in 1921 after the founders' deaths and listed on the London Stock Exchange in 1938.
