Sweetener and ingredients firm Tate & Lyle has agreed to a £2.7 billion takeover by US rival Ingredion Incorporated, marking another foreign acquisition of a British company. The deal, which values Tate & Lyle at £3.7 billion including debts, will see Illinois-based Ingredion pay up to 615p per share, comprising 595p in cash plus dividend payments.
Market Reaction and Context
Shares in Tate & Lyle surged more than 13% in Monday morning trading, building on a 40% rise since takeover talks were announced last month. The FTSE 250-listed company, founded over 165 years ago, has faced a challenging period with falling share prices and weak financial results.
The takeover follows a spate of foreign acquisitions of UK firms, dealing another blow to the London market. Ingredion has cautioned that a review of Tate & Lyle's operations could lead to "material" job cuts, targeting around $130 million in annual savings by 2030. An estimated 480 roles, or 3% of the combined 16,000-strong workforce, could be at risk, primarily in corporate, manufacturing, and support functions where roles overlap.
Company Background
Tate & Lyle, known historically for sugar products, sold its sugar division including the Golden Syrup factory in London to American Sugar Refining in 2010 for £211 million. The company now focuses on sweeteners and industrial food ingredients. Last year, it acquired CP Kelco for around £1.4 billion. It employs nearly 5,000 workers across 75 sites in 37 countries, with just two UK sites: its London head office and a factory in Mold, North Wales, employing around 200 staff.
Ingredion, headquartered in Westchester, Illinois, employs over 11,000 people globally. The combined group will be based in Ingredion's current head office, with the future of Tate & Lyle's UK operations uncertain pending a review. Jim Zallie, Ingredion's chairman and CEO, will lead the enlarged group.
Industry and Analyst Views
David Hearn, chairman of Tate & Lyle, said: "We believe the next chapter with Ingredion will create a business with even greater potential, greater scale, and increased investment in innovation." Jim Zallie added: "Combining Ingredion and Tate & Lyle’s complementary portfolios creates a global leader in ingredient solutions."
Victoria Scholar, head of investment at interactive investor, called it a "very attractive offer," noting that the UK business had been struggling with weak share performance and disappointing results, leaving it vulnerable to a takeover.
