Tate & Lyle has anoounced that it is in the final stages of discussions with Syral SAS on the disposal of certain businesses including the starch business. A full copy of the anouncement is below:
Tate & Lyle announces 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“), and that it has today begun the consultation process with the European and local works councils and other employee representatives.
Tate & Lyle announced on 25 October 2006 that it was exploring the possibility of the full or partial disposal of TALFIIE. The TALFIIE operations that are subject to the ongoing discussions (”the Target Businesses“) announced today 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 (upon completion) 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 (”SSC“). 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.
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.