Tate & Lyle, one of Britain’s most recognisable food and ingredients brands, has agreed to be sold to American rival Ingredion in a £2.7 billion deal — the latest in a growing wave of British companies falling into foreign hands that is fuelling alarm about the vulnerability of UK-listed firms to overseas predators.
The FTSE 250 ingredients firm, founded in Liverpool in 1921 through the merger of two family-owned sugar businesses, confirmed on Monday that it had agreed to an all-cash takeover from Illinois-based Ingredion at 595p per share plus a 20p dividend, representing a total value of 615p per share. That figure amounts to a 64 per cent premium to Tate & Lyle’s share price before Ingredion first made its interest public two weeks ago — a disclosure that had already sent shares soaring by more than 45 per cent. Tate & Lyle’s shares jumped a further 12.3 per cent to 552p on Monday morning following the official announcement.
The deal will see the historic company leave the London stock market entirely. Ingredion chief executive Jim Zallie said the combined business would be “better positioned to serve customers’ needs for the development of great-tasting, healthier and affordable food products that consumers demand.”
The takeover follows a difficult period for Tate & Lyle. The company issued a profit warning last October and revealed a 10 per cent drop in first-half profits in November, with its shares coming under sustained pressure amid weak consumer demand, rising costs and growing concern about the impact of weight loss drugs on demand for food ingredients. The company had already shed its most famous consumer brand — Lyle’s Golden Syrup and the wider European sugar operations — when it sold them to American Sugar Refining back in 2010.
The deal adds to a growing list of British companies absorbed by foreign buyers this year. Last week, William Hill owner Evoke agreed to a £243 million takeover by Greek gaming group Intralot. In recent months, laboratory testing firm Intertek supported a £9.4 billion bid from Swedish private equity group EQT, US firm Nuveen completed a £9.9 billion takeover of asset manager Schroders, and Lloyd’s of London underwriter Beazley agreed to be acquired by Zurich Insurance in an £8.1 billion deal.
The pattern has intensified concern in financial and political circles that chronically undervalued British companies are being bought on the cheap by overseas acquirers taking advantage of the persistent discount at which London-listed stocks trade relative to their American and European counterparts — a trend that poses long-term questions about the health and attractiveness of the London Stock Exchange as a home for major businesses.
