Tate & Lyle (TATE) has agreed to recommend a takeover by US ingredients giant Ingredion after securing an improved offer that values the business at up to £3.8 billion including debt, bringing months of speculation to a close and sending shares sharply higher.
The London-listed food and beverage ingredients supplier said shareholders will receive 595p in cash per share, alongside entitlement to a final dividend of up to 13.2p and an interim dividend of up to 6.8p.
Assuming both payments are made in full, the total value rises to 615p per share, equivalent to an equity valuation of roughly £2.8 billion and an enterprise value of £3.8 billion.
The offer represents a 64% premium to Tate & Lyle’s closing share price of 374.80p on 13 May, the day before the takeover period began. Investors welcomed the deal, pushing the shares up 14% to 561p on Monday.
Ingredion, headquartered Illinois, had previously approached Tate & Lyle with an unsolicited proposal worth 530p per share, an offer the company rejected on the grounds that it undervalued the business.
In May, Ingredion returned with a non-binding proposal worth as much as 615p per share and has now formally committed to the transaction ahead of a deadline to announce a firm offer.
The takeover has unanimous backing from Tate & Lyle’s board, while shareholders controlling 17.1% of the company’s shares have already committed to vote in favour of the deal.
The agreement arrives during a difficult trading period for Tate & Lyle. Although reported revenue rose 16% to £2.01 billion in the year to 31 March following the acquisition of CP Kelco, adjusted revenue fell 3%. The company completed the $1.8 billion purchase of the nature-based ingredients specialist in November 2024 as part of its strategy to expand its speciality ingredients portfolio.
Reported pre-tax profit increased 49% to £131 million, yet adjusted pre-tax profit declined 5% to £238 million and adjusted EBITDA slipped 3% to £415 million. Management has repeatedly pointed to subdued customer demand and challenging market conditions, warning that uncertainty could delay a return to sustained revenue growth.
Looking ahead, Tate & Lyle expects only modest revenue growth in financial 2027, with EBITDA broadly flat before the impact of a planned bio-gums capacity consolidation. The forecast also assumes limited disruption from the conflict in the Middle East.
Ingredion believes the acquisition will strengthen its position across North America, Europe and emerging markets while creating a larger ingredients business with annual revenue of around $9.9 billion and adjusted EBITDA of approximately $1.8 billion.
The US group expects the combination to deliver annual cost savings of $130 million by the end of 2030, although achieving those efficiencies is expected to require one-off costs of around $175 million.