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Highlights
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Tate & Lyle PLC will proceed with its US$1.8 billion acquisition of CP Kelco without requiring shareholder approval, following new UK listing rules.
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The acquisition is expected to enhance revenue growth and increase net assets significantly, creating a leading food and beverage solutions business.
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Huber will hold a 16% stake in the enlarged entity and gain the right to appoint two non-executive directors to the board.
Overview
Tate & Lyle PLC {LSE:TATE} has announced that shareholders will not have the opportunity to vote on its US$1.8 billion (£1.4 billion) takeover of CP Kelco, following the implementation of new UK listing rules that took effect in July. According to the updated regulations, shareholder approval is no longer a prerequisite for such significant transactions. Consequently, Tate & Lyle and the seller, Huber, have opted not to put the acquisition to a shareholder vote. The deal is now only subject to customary regulatory approvals.
Unveiled in June, the acquisition of CP Kelco, a company specializing in pectin and specialty gums, is positioned to create a leading food and beverage solutions business. Tate & Lyle anticipates that the transaction will drive revenue growth toward the higher end of its annual target range of 4% to 6%. Additionally, the company expects the acquisition to boost net assets by £452 million.
As part of the agreement, Huber will acquire a 16% equity stake in the newly formed entity and will have the right to appoint two non-executive directors to Tate & Lyle’s board, further solidifying its partnership in the business.
In a separate statement, Tate & Lyle confirmed that its guidance for the current fiscal year, ending in March, remains unchanged. The company projects a slight decline in revenue compared to the previous year, while adjusted earnings are anticipated to increase by 4% to 7%.
The CP Kelco acquisition is expected to close by the end of the calendar year, marking a significant step in Tate & Lyle’s strategic efforts to enhance its offerings in the food and beverage sector. This move reflects the company’s commitment to expanding its capabilities and driving future growth in a competitive market.
