Tate & Lyle board backs Ingredion’s £2.7B cash offer to create specialty ingredients powerhouse

Tate & Lyle’s board has unanimously recommended Ingredion’s cash offer for the UK-headquartered specialty ingredients business, valuing its share capital at approximately £2.7 billion (US$3.6 billion). The proposed transaction implies an enterprise value of approximately £3.7 billion (US$5 billion) and would create a scaled global ingredient solutions provider spanning texture, sugar reduction, mouthfeel, sweetening, and fortification.

The combined group would represent approximately US$9.9 billion in revenue and adjusted EBITDA of US$1.8 billion. The companies say the business will be better positioned to support F&B manufacturers, as they reformulate products to meet consumer demand for healthier, affordable, and better-tasting products.

Ingredion says the deal will create “a global leader in ingredient solutions,” broadening its specialty ingredients platform across texturants, sugar reduction, and fortification. The company will gain access to Tate & Lyle’s capabilities in multi-ingredient systems, recipe development, mouthfeel, and sweetening.

“Combining Ingredion and Tate & Lyle’s complementary portfolios establishes… the innovation expertise and geographic reach that will help create the future of food,” says Jim Zallie, chairman, president, and CEO of Ingredion.

“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.”

The acquisition brings together complementary geographic supply networks across the Americas, Europe, the Middle East and Africa, and Asia Pacific. Ingredion says this will allow the combined group to deliver faster, more reliable, and cost-effective ingredient solutions for customers worldwide.

Tate & Lyle’s transformation

Tate & Lyle has undergone a significant reshaping in recent years, moving away from commodity ingredients and toward specialty F&B solutions. The company sold its Primary Products business in the Americas to KPS Capital Partners through transactions completed in 2022 and 2024.

It then acquired CP Kelco in November 2024, strengthening its capabilities in pectin and specialty gums and expanding its position in mouthfeel, sweetening, and fortification.The deal will expand Ingredion’s capabilities across texture, sugar reduction, mouthfeel, sweetening, and fortification.

The company now has around 5,000 employees across 75 locations in 37 countries and serves customers in more than 120 countries.

David Hearn, chair of Tate & Lyle, says the business has been “successfully repositioned as a leading global specialty food and beverage solutions business aligned to growing consumer demand for healthier, more nutritious and sustainable food and drink.”

“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 of Tate & Lyle believes Ingredion’s offer represents an attractive opportunity for shareholders to crystallize value in cash, and that it will be an excellent steward of Tate & Lyle.”

Synergies and shareholder value

Ingredion expects the integration to deliver run-rate net cost synergies of approximately US$130 million, fully realized by the end of 2030. The one-time costs required to achieve these savings are expected to total around US$175 million by the same date.

The anticipated synergies are expected to come from selling, general, and administrative expenses, as well as cost of goods sold. Areas identified include procurement savings, network flow optimization, logistics and warehousing, operating and IT expenses, and management and public company cost savings.

Ingredion expects the transaction to be accretive to adjusted earnings per share in the first year following completion. The more detailed transaction announcement says it is expected to be more than 15% accretive to adjusted EPS in the first full fiscal year after the effective date.Tate & Lyle has repositioned itself as a specialty F&B solutions business after divesting Primient and acquiring CP Kelco.

Ingredion plans to finance the acquisition through existing cash resources, new debt financing, and, if required, a drawdown on a fully committed bridge financing facility.

The company expects pro forma net leverage at completion to be around three times net debt-to-adjusted EBITDA and says it remains committed to maintaining a strong investment-grade credit profile. It aims to reduce leverage to approximately 2.5x within around 18 months of completion.

Market headwinds

Tate & Lyle’s board says the offer should be viewed against a challenging trading backdrop for ingredients companies and their customers. Consumer sentiment has weakened across major regions, and several ingredients and CPG companies have reduced near-term expectations.

For the year ended March 31, 2026, Tate & Lyle delivered a 3% revenue decline and a 3% pro forma adjusted EBITDA decline, in line with expectations set out in October 2025. The company also delivered over US$50 million in productivity savings during the year and raised its five-year productivity savings target to US$200 million by the end of its 2028 financial year.

The Tate & Lyle board says it remains confident in the company’s standalone strategy but believes the certainty of cash value offered by Ingredion represents attractive risk-adjusted value for shareholders.

Path to completion

The acquisition is expected to be implemented through a court-sanctioned scheme of arrangement under the UK Companies Act 2006, although Ingredion reserves the right to proceed by takeover offer, subject to regulatory consent.

Completion remains subject to Tate & Lyle shareholder approval, UK High Court sanction, and antitrust approvals. Ingredion has received irrevocable undertakings to vote in favor of the scheme in respect of approximately 17.1% of Tate & Lyle’s existing issued ordinary share capital, including shares held by Huber Equity Corporation and Tate & Lyle directors.

The transaction is expected to be completed in the second half of 2027.