The Mexican subsidiary of Tate and Lyle has agreed to sell its 49% shareholding in Grupo Industrial Azucarero de Occidente (Occidente) to ED&F Man, a global commodities supplier of food, animal feed and bioenergy.
The decision to sell was based on Tate & Lyle’s aim to reduce its exposure to particularly volatile commodity markets, and it follows an announcement last week of the completion of the sale of the company’s European wheat starch plants.
According to Iain Ferguson, chief executive of Tate & Lyle this decision was taken to eliminate “our direct exposure to the European wheat market which has been particularly volatile in recent months”.
Commenting on the two decisions, he remarks: “Both these transactions represent important steps in our strategy of reshaping our business to reduce the impact of our exposure to volatile raw material and commodity markets as we build a stronger value added business. I would like to take this opportunity to thank the employees of Occidente for their commitment and hard work over the years, and our former partners in Mexico for their constant support, and wish them all every future success.”
ED&F Man’s right acquire Tate & Lyle Mexico’s share is subject to Occidente’s majority shareholder’s option to acquire 1% of those shares. The sale of Occidente is also conditional upon clearance under the Mexican federal economic competition law.
Upon completion of the sale, Tate & Lyle will receive a consideration of US$93mn, which will be used to reduce group debt. This is expected to be finalised by early December.