Speciality food and drink ingredients supplier Tate & Lyle has agreed to a £2.7bn takeover bid from Illinois-based rival Ingredion.
Under the terms of the recommended cash offer, shareholders of London-listed Tate & Lyle will receive £5.95 per share plus a final dividend no greater than 13.2p per share. They will also get an interim dividend of up to 6.8p per share in relation to the six-month period ended 30 September 2026.
The cash consideration of the deal, which ends a series of previously rejected proposals from Ingredion, values Tate & Lyle at approximately £2.7bn – or £3.7bn including debt – representing a headline offer premium of roughly 64% to the closing share price on 13 May 2026. Turnover for the combined group is estimated to be around $9.9bn (£7.4bn) with adjusted EBITDA of $1.8bn.
Tate & Lyle share price has been on a downwards slide over the past five years, amidst a continued challenging economic backdrop and muted demand in the ingredients sector. However, news of acquisition talks with Ingredion caused a 45% surge in May.
The British company had previously reported 3% declines in both revenue and adjusted EBITDA for the year ended 31 March 2026, despite over £50m of productivity savings, with expectations lowered for near-term future performance.
Ingredion said it believes that the acquisition of Tate & Lyle represents a compelling opportunity to accelerate its customer solutions-led growth strategy to create a scaled specialty ingredients platform. The combination would bring together complementary portfolios, technical expertise and geographic networks, and would be better placed to help customers address growing consumer demand for food and beverage products that are affordable, nutritious and high-quality, it noted.
This includes enhancing Ingredion’s texture and sugar reduction capabilities with Tate & Lyle’s expertise in mouthfeel, sweetening, and fortification.
Established in 1921 through the merger of British family sugar businesses, Tate & Lyle currently has around 5,000 employees working in 75 sites across 37 countries, and serves customers including bakeries in more than 120 countries. It sold its namesake sugar business in 2010 to American Sugar Refining for £211m before shifting focus to making artificial sweeteners and speciality food ingredients. In 2024, it bought US-based speciality gums and pectins supplier CP Kelco for $1.8bn.
“Over the last few years, Tate & Lyle has been successfully repositioned as a leading global speciality food and beverage solutions business aligned to growing consumer demand for healthier, more nutritious and sustainable food and drink,” commented David Hearn, who became chairman of Tate & Lyle in 2023.
“Looking forward, we believe the next chapter with Ingredion will create a business with even greater potential, greater scale, and increased investment in innovation in support of customers.”
The integration is expected to deliver significant run-rate net cost synergies of approximately $130m by the end of 2030, with one-off costs to achieve these annual savings amount to around $175m.
No comments yet