Tate & Lyle in Advanced Negotiations with Syral

14/05/07 Tate & Lyle has said that it is at an advanced stage of exclusive discussions with Syral SAS (a subsidiary of Tereos of France) which may lead to the disposal of its interest in certain of the facilities of its Food & Industrial Ingredients, Europe division (TALFIIE). It has begun the consultation process with the European and local works councils and other employee representatives.

The gross cash consideration for the Target Businesses before restructuring costs is expected to be in the range of £200 million to £220 million. Based on un-audited pro forma figures for the year 31 March 2007, the proportions of TALFIIE operating profits and net operating assets attributable to the Target Businesses were both approximately 50%. On the assumption that an agreement in the terms currently contemplated is entered into, the Board is now actively considering the utilisation of the proceeds as part of a return of capital to shareholders and expects to be in a position to update shareholders in this regard at the AGM on 18 July 2007.

The TALFIIE operations that are subject to the ongoing discussions are those in the UK, Belgium, France, Spain and Italy. Tate & Lyle’s operations in Koog, The Netherlands (the main site in Western Europe for corn-based value added starch production), Morocco and the Eaststarch joint venture (which has operations in Hungary, Slovakia, Bulgaria, Romania and Turkey) are excluded from these discussions. Tate & Lyle will continue to develop its value added ingredients business in Europe through these businesses together with its Global Food Ingredients Group, which includes Cesalpinia Foods, and G.C. Hahn, and will continue to seek to supplement its value added business through the acquisition of further bolt-on ingredient companies. TALFIIE’s Belgian entity includes the head office, shared service centre and single billing entity in Aalst, Belgium. The SSC is excluded from the sale discussions and consultations are now underway regarding how, if the disposal of the Target Businesses goes ahead, the functions currently performed in the SSC will be restructured to reflect the requirements of Syral and of Tate & Lyle for their respective retained operations in Europe. Following consultation with employee representatives, any transaction would be subject to antitrust approval in Europe. The earliest anticipated date for completion is therefore the end of summer 2007.

Tereos is an agro-industrial cooperative Group which processes 500,000 hectares of sugar beets, sugar canes and cereals into sugars and alcohols. Tereos brings together 14,000 sugar beet and cereal farmers and employs 6,500 people. Tereos operates 27 industrial production facilities in France, Czech Republic, Brazil, La Réunion and Mozambique to produce 2.9 million tonnes sugar and 1 million m3 of ethanol and alcohol. Syral is the fourth largest European producer of glucoses and other starch-based sweeteners. Syral said that the acquisition will mean that it will process 3 million tons grain (both wheat & corn) into 115,000 m3 of ethanol and 1.5 million tons of starches and starch sweeteners (glucoses, dextrose, maltodextrins and polyols), delivered to the food, pharmaceutical, chemical and paper/board industries. Consolidated turnover will exceed € 900 million.

Pierre-Christophe Duprat, Managing Director, Syral, said “Already successfully committed to the production of glucoses and other starch derivatives for 10 years, Syral seizes this unique opportunity of expanding its position to offer a wider geographical implantation and a wider product portfolio to its European customers. Syral will be able to fulfil developing needs of its European food customers for new sweetening formulations by offering a large range of natural sweeteners. Tereos, our mother company, will also be able to seize further development opportunities in non-food applications, as the starch molecule is the key for development of the green chemistry.”