Ebro to Sell Sugar Unit to Associated British Foods
The Board of Directors of Ebro Puleva, sole shareholder of Azucarera Ebro, and Associated British Foods, sole shareholder of British Sugar, have reached an agreement in principle for the sale of Azucarera Ebro.
21/11/08 The Board of Directors of Ebro Puleva (www.ebropuleva.com), sole shareholder of Azucarera Ebro, and Associated British Foods (ABF) (www.abf.co.uk), sole shareholder of British Sugar (www.britishsugar.co.uk), have reached an agreement in principle for the sale of Azucarera Ebro (www.azucarera.es). The agreement is subject to execution of the necessary legal contracts which is expected to occur within the coming weeks. Completion will be subject to the approval by the anti-trust authorities and will foreseeably be happening within the first four months of 2009.
Total consideration of the transaction is 526 million euro with the following breakdown:
- ABF will purchase the sugar business for 385 million euro, debt free.
- Ebro Puleva will receive 141 million euro from third parties, corresponding to other compensations, mainly the restructuring funds established under the CMO sugar reform.
Under this agreement in principle Ebro Puleva will incorporate into its real estate portfolio, more than 200 hectares of land classified for various uses, with an estimated value of 42 million euro.
The transaction, which concludes a process began by the Board of Directors in May 2008 and ratified by the General Shareholders Meeting one month later, is very positive for the future of the beet and sugar sector in Spain, since Azucarera Ebro will be joining the second largest sugar producer in the world. British Sugar, with a global production of four million tonnes a year, is present in nine countries across Europe, Southern Africa and China. Moreover, back in April 2008 British Sugar and Azucarera Ebro entered into a contract for the future supply of raw sugar to the new refinery in Guadalete through Illovo Sugar Ltd, part of the British Sugar Group.
For the Ebro Puleva Group, this transaction will represent a leap forward in its current strategic plan, geared essentially towards focusing its efforts and resources on its key businesses (rice, pasta, dairy and functional foods), shedding non-strategic businesses, reducing its debt and optimising overheads. Banco Santander has acted as financial advisor to the seller.
