Tate & Lyle agrees sale of Mexican sugar business
Occidente operates three sugar mills in Mexico. On completion, Tate & Lyle will receive a consideration of US$93 million (£46 million). The consideration will be used to reduce Group debt.
09/10/07 Tate & Lyle PLC has said that its Mexican subsidiary (Tate & Lyle Mexico) has signed an agreement for the sale of its 49% shareholding in Grupo Industrial Azucarero de Occidente, S.A. de C.V. to E D & F Man Holdings Limited. Occidente operates three sugar mills in Mexico. E D & F Man’s right to acquire Tate & Lyle Mexico’s 49% interest in Occidente is subject to Occidente’s majority shareholder’s option to acquire 1% of those shares. If such option is exercised then E D & F Man would acquire a 48% interest in Occidente.
On completion, Tate & Lyle will receive a consideration of US$93 million (£46 million). The consideration will be used to reduce Group debt.
The sale of Occidente is conditional upon clearance under the Mexican Federal Economic Competition Law. Completion is expected by early December.
At 31 March 2007 Tate & Lyle’s share of the net operating assets of Occidente was £42 million. Tate & Lyle’s share of the operating profit for the year to 31 March 2007 was £6 million. The move comes shortly after Syral acquired Tate & Lyle’s European starch business.
Iain Ferguson, Chief Executive, Tate & Lyle said, “Last week, we announced the completion of the sale of our European wheat starch plants, eliminating our direct exposure to the European wheat market which has been particularly volatile in recent months. Today, we are announcing the sale of our interest in Occidente, our Mexican cane sugar business. Both these transactions represent important steps in our strategy of reshaping our business to reduce the impact of our exposure to volatile raw material and commodity markets as we build a stronger value added business. I would like to take this opportunity to thank the employees of Occidente for their commitment and hard work over the years, and our former partners in Mexico for their constant support, and wish them all every future success.”
