Ingredion to buy Tate & Lyle for £2.7 billion in all-cash deal

Key Takeaways:

• Ingredion pays 615 pence per share, a 60% premium
• Deal creates a global specialty ingredients leader
• Tate & Lyle is the latest UK brand to leave London

Ingredion Inc. agreed to acquire Tate & Lyle Plc for £2.7 billion ($3.6 billion) in an all-cash deal, marking another iconic British brand's departure from the London Stock Exchange as the US ingredients giant seeks to build a global specialty food-solutions provider.

The Westchester, Illinois-based company will pay 595 pence in cash for each Tate & Lyle share, plus investors are entitled to receive up to 20 pence per share in dividends, according to a statement Monday. The 615-pence total consideration represents a roughly 60% premium to Tate & Lyle's closing price of 491.40 pence on Friday before Bloomberg News first reported the potential offer in May.

"The board of Tate & Lyle believes Ingredion's offer represents an attractive opportunity for shareholders to crystallise value in cash, and that it will be an excellent steward of Tate & Lyle," David Hearn, chairman of Tate & Lyle, said in the statement.

Tate & Lyle, one of the oldest listed companies in the UK dating back to the late 1800s as a sugar refiner, has been under pressure. The company warned on full-year profits last October and reported a 10% drop in first-half profits in November. It sold its sugar business in 2010 to focus on sugar replacements, calorie reducers and dietary fibers, and bought CP Kelco, a leader in specialty gums and pectins, for $1.8 billion in 2024.

The acquisition broadens Ingredion's specialty ingredients platform across texturants, sugar reduction and fortification, adding complementary capabilities in multi-ingredient systems and recipe development. The combined company will have expanded geographic supply networks across the Americas, Europe, the Middle East and Africa, and Asia Pacific.

Ingredion, which rebranded in 2012 from a corn-refining focus toward food additives for healthier products, has a market capitalization of $6.3 billion. The deal values Tate & Lyle at about £3.7 billion including debt.

Regulators could oppose the consolidation, analysts including Barclays' Alex Sloane have warned. JPMorgan Chase & Co. is advising Ingredion, while Tate & Lyle is working with Goldman Sachs Group Inc., Mizuho Financial Group Inc.'s Greenhill & Co. unit, Citigroup Inc. and Bank of America Corp.

The acquisition is the latest in a string of UK companies leaving London's equity market, raising concerns about the exchange's competitiveness. Tate & Lyle's departure follows a trend of British firms being acquired by US and European rivals amid valuation discounts on the London Stock Exchange.

This article is for informational purposes only and does not constitute investment advice.