British firm Tate & Lyle said on Thursday it had agreed to sell its historic European sugar business to American Sugar Refining Inc. to cut debt and focus on specialty food ingredients.
"Tate & Lyle PLC announces today it has signed an agreement for the sale of its EU Sugar Refining operations (EUS) to American Sugar Refining," the group said in an official statement.
"The consideration is 211 million pounds (US$314 million) payable in cash, subject to closing adjustments for net cash and working capital, with the proceeds used to reduce net debt."
The EUS division comprises cane sugar refineries in London and Lisbon, the Lyle's Golden Syrup factory in London, associated sugar and syrup brands, and the Tate & Lyle Process Technology consulting business.
The group's history dates back to 1878, when the Thames sugar refinery was opened in Silvertown, east London, by the group's founder Henry Tate. Abram Lyle then opened his own refinery in Plaistow, London, in 1883, finding huge success with the Golden Syrup brand.
The two rival groups, Henry Tate & Sons and Abram Lyle & Sons, merged in 1921 to create sugar giant Tate & Lyle.
However, around two-thirds of the British group's profits now stem from higher-margin products like sweeteners, starches and ethanol.
"Sugar refining has enjoyed a long and proud history within Tate & Lyle, but we believe the interests of this business and its employees are now best served by being part of a company for whom sugar refining is core," said Tate Chief Executive Javed Ahmed in the statement on Thursday.
"Tate & Lyle's clear priority is to grow its specialty food ingredients business, supported by cash generated from bulk ingredients.
"This disposal will enable us to concentrate our resources on delivering our strategic objectives as we focus, fix and grow our business."
Copyright Agence France-Presse, 2010
