LONDON, (Reuters) – Britain’s Tate & Lyle is selling its European sugar operations to American Sugar Refining for 211 million pounds ($315 million), breaking a 150-year link to sugar in favour of low-calorie sweeteners offering faster growth.
The privately-owned U.S. group is buying Tate’s sugar and Golden Syrup business with a perpetual licence to use the Tate & Lyle name, while Tate said yesterday it will focus on its sweeteners such as Splenda and its industrial starches.
The British sugar maker’s roots go back to 1859 when Henry Tate started refining, then introduced the sugar cube to Britain in 1875, and his legacy lives on after he bequeathed his paintings to form the nucleus of London’s Tate Britain gallery.
Tate’s new Chief Executive Javed Ahmed sparked talk of a sale of its underperforming sugar operations in May when he promised to focus on its super sweetener Splenda and corn-based sweeteners and starches largely made in the United States..
Tate shares were up 2.7 percent to 462.1 pence at 1029 GMT in a lower London market as analysts welcomed its exit from a low profits business and after it gained a higher than expected price for a commodity business subject to big world sugar price swings.
“We see the move as positive as it offers a cash injection and a move away from commoditised businesses,” said analyst Dirk Van Vlaanderen at Jefferies International, while Graham Jones at Panmure Gordon said it was a very welcome move at a good price.
