Tate & Lyle has moved a step closer to a takeover by ingredients supplier Ingredion after agreeing terms with the US rival.
The two firms entered talks over a £2.7bn deal last month.
This morning, London-listed Tate & Lyle revealed its board intended to recommend a cash offer of 595p per share to its shareholders.
A final dividend of no more than 13.2p per share for the year to 31 March 2026 will also be paid, along with a interim dividend of no greater than 6.8p for the half year to 30 September.
Shares in Tate & Lyle shot up 45% to 545p when the talks between the two groups was announced last month, climbing further to 570p this month in anticipation of a deal.
The 615p transaction represented a 64% premium to Tate & Lyle’s shares before talks with Ingredion were confirmed.
Tate & Lyle’s directors said the terms of the deal were “fair and reasonable”.
Illinois-headquartered Ingredion, which specialises in reformulation, with a focus on sugar reduction and plant protein, added the takeover represented a compelling opportunity to accelerate its growth strategy to create a scaled specialty ingredients platform.
What will a merger do for Tate & Lyle and Ingredion?
Tate & Lyle chairman David Hearn said: “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.
“I would like to recognise the exceptional contribution of the team at Tate & Lyle for their talent, insight and commitment which has been a key driver of this transformation and the business we have built. 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 board believes Ingredion’s offer represents an attractive opportunity for shareholders to crystallise value in cash, and that it will be an excellent steward of Tate & Lyle. The board therefore unanimously recommends Ingredion’s offer to Tate & Lyle shareholders.”
Ingredion chairman Jim Zallie added: “Combining Ingredion and Tate & Lyle’s complementary portfolios creates a global leader in ingredient solutions with the expertise and geographic reach to help shape the future of food. The combined business will be better positioned to serve customers’ needs for the development of great-tasting, healthier and affordable food products that consumers demand.
“This compelling combination will create exciting new possibilities for employees and generate significant value for all stakeholders.”
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