Tate & Lyle confirms break-up with £1.2bn sweetener division sale
Historic foodstuffs brand Tate & Lyle will be broken up, it confirmed this morning, as it sells off the controlling stake in its sweeteners division for £1.2bn.
American private equity firm KPS Capital Partners will take a 50 per cent stake in Tate & Lyle’s “Primary Products” business, which makes commodities like artificial sweeteners and industrial starches.
Tate & Lyle will retain the remaining 50 per cent of the business, but KPS will have control of the new firm’s board and operations.
Shareholders will get £500m by way of a special dividend as a result of the sale, which is expected to complete in the first quarter of 2022.
Shares in Tate & Lyle rose 2.0 per cent as markets opened this morning.
The firm said that the “transformational” move would position Tate & Lyle for growth, with more focus on specialty markets.
It was also maintain control of its “Primary Products” businesses in Europe, with the new firm comprising of its operations in North and Latin America.
Nick Hampton, chief executive of Tate & Lyle, commented: “Today’s announcement represents the next phase in the evolution of Tate & Lyle. Our one strong company will become two stronger businesses, both in a position to pursue new and exciting growth opportunities in their respective markets.
Michael Psaros, co-founder and managing partner of KPS Capital Partners, said: “KPS is excited to make a controlling investment in Primary Products and is honoured to partner with Tate & Lyle for many years to come.
“KPS and Tate & Lyle have complete alignment of interests and have cemented a partnership based on shared values such as the safety of our respective employees and a demonstrated commitment to sustainability.
“KPS believes that Primary Products is a superior investment opportunity and that there is a tremendous opportunity to materially increase revenues, productivity and profitability.”