Associated British Foods in discussion for Illovo takeover

16/03/06 Associated British Foods plc has confirmed that it is in discussions about a potential transaction that could involve it acquiring a 51% interest in Illovo Sugar Limited. There is no certainty that these discussions will lead to an offer. Further announcements will be made as appropriate.

Illovo is listed on the JSE Securities Exchange South Africa with a market capitalisation of £510 million (R5.5 billion). Its sales in 2004/05 were £480 million (R5.1 billion) and it has a total asset base of £375 million (R4.0 billion).

It is the largest sugar producer in Africa and one of the world’s leading low cost sugar producers. The company grows and processes sugar cane in South Africa, as well as Malawi, Mozambique, Swaziland, Tanzania and Zambia and produced 1.9 million tonnes of sugar in 2004/05. It has identified development programmes to expand this capacity substantially.

Illovo currently exports to the EU under the ACP protocol, principally through Swaziland. With the recently announced changes to the EU sugar regime, Malawi, Mozambique, Tanzania and Zambia are classified as LDC countries and will receive unrestricted access for sugar exports to the EU from 2009.

ABF is a diversified international food, ingredients and retail group with global sales of £5.6 billion and over 42,000 employees. It is listed on the London Stock Exchange with a market capitalisation of £6.8 billion. It operates in 41 countries with significant businesses outside Europe in Australia, China and the US. It has had a successful history of international partnerships with minority shareholders. The group operates in four business categories: Primary Food & Agriculture, Grocery, Ingredients and Retail.

British Sugar is a wholly owned, substantial and core business within ABF. It has sugar operations in the UK, Poland and China which process around 2 million tonnes of sugar annually.