Shares in Tate & Lyle have surged 45% after the ingredients giant confirmed it was in talks to merge with US peer Ingredion.
Ingredion has offered Tate & Lyle shareholders £2.7bn for a 100% buyout of the UK PLC, with around 97% of the purchase price to be paid in cash. The offer has followed “a number of earlier approaches” by Ingredion, Tate & Lyle said.
“The board and Ingredion are in discussions regarding the proposal,” the company told investors.
“There can be no certainty that any offer will be made, nor as to the final terms on which any offer might be made. A further announcement will be made when appropriate.”
Ingredion must decide whether to make a firm offer by 5pm on 11 June.
Since selling its sugar division in 2010, Tate & Lyle has made a strategic shift into ingredients used to reformulate HFSS foods. The group manufactures sweeteners, high-fibre additives, and fortifying agents from laboratories and factories around the world.
Illinois-headquartered Ingredion also specialises in reformulation, with a focus on sugar reduction and plant protein.
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