Tate & Lyle agrees to buy US-based ingredients firm CP Kelco in £1.4bn deal

tate & lyle agrees to buy us-based ingredients firm cp kelco in £1.4bn deal

London-listed firm Tate & Lyle has revealed a £1.4billion takeover deal

Tate & Lyle has struck a deal to acquire CP Kelco, a US-based producer of pectin and xanthan gum, in a deal valued at approximately £1.4 billion.

The FTSE 250-listed firm informed its shareholders of the impending purchase from JM Huber Corporation. Tate & Lyle's CEO, Nick Hampton, said that the merger will unlock "significant" growth opportunities for the combined entity.

This move is part of Tate & Lyle's broader strategic pivot under Hampton's leadership over the past six years, steering the company towards sectors that align with the increasing demand for healthier and more sustainable food options. In line with this shift, just last month, Tate & Lyle divested its remaining interest in Primient, a business focused on corn-based products used in fizzy drinks and sweets, netting £279million.

The acquisition of CP Kelco is set to fast-track Tate & Lyle's expansion plans, promising to "drive stronger revenues" and enhance profit margins in the future. The company anticipates achieving at least £40 million in cost synergies within two fiscal years following the deal.

Completion of the acquisition is scheduled for the final quarter of 2024, according to Tate & Lyle. Hampton commented on the development, saying: "Following on from the announcement of the proposed sale of our remaining interest in Primient last month, the proposed combination with CP Kelco represents a significant acceleration of our growth-focused strategy."

"It creates a leading, global speciality food and beverage solutions business, ideally placed to benefit from the structural trends towards more plant-based, clean-label and sustainable ingredients and solutions. The growth potential of the proposed combined business is significant and we look forward to the future with confidence and excitement."

On Thursday, Tate & Lyle also revealed they will roll out a share buyback scheme valued up to £215million.

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