Tate & Lyle loses its taste for historic sugar-based products
Tate & Lyle yesterday confirmed plans to sell its European sugar operations to American Sugar Refining for £211m, breaking a 150-year link to sugar in favour of low-calorie sweeteners offering faster growth.
The privately-owned US group is buying Tate’s sugar and Golden Syrup business with a perpetual licence to use the Tate & Lyle name, while Tate 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.
“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 welcome move at a good price.