UK's Tate & Lyle shares soar as Ingredion pursues $3.7 billion takeover
Ingredion's Takeover Bid and Market Impact
By Yamini Kalia
Takeover Proposal Details
May 14 (Reuters) - U.S. food ingredients maker Ingredion is in talks with British rival Tate & Lyle over a possible takeover of the London-listed firm in a 2.74 billion pound ($3.7 billion) deal, the British company said on Thursday, sending its shares 55% higher.
A deal between Tate & Lyle, known for its artificial sweeteners used in Coca-Cola drinks, and Ingredion, could create a food and beverage ingredients giant worth more than $10 billion, at a time when consumers are increasingly opting for low-calorie drinks and diets.
Shareholder Offer and Premium
Under the proposal, Tate & Lyle said its shareholders would receive up to 615 pence per share - comprising 595 pence in cash and up to 20 pence in dividends - a 64% premium to its closing price on Wednesday.
"This is a level that the board would have to consider .... This disclosure will act as a price discovery mechanism to see if a deal can be struck,” Lucinda Guthrie, head of Mergermarket, told Reuters.
Market Reaction
Shares in Tate & Lyle, which supplies ingredients to food companies including Unilever and Nestle , rose to as much as 580 pence, their highest level in nearly a year.
"Ingredion believes a potential transaction would deliver significant benefits to customers, consumers, employees and Ingredion shareholders," the U.S. firm said in a statement.
Industry Trends and Company Performance
Challenges Facing Tate & Lyle and Ingredion
Tate & Lyle has faced declining revenue and profit amid weak U.S. bakery demand, lower European pricing and rising costs, while Ingredion has seen softer demand for its legacy starches and sweeteners as consumers shift toward healthier and plant-based options.
Recent Acquisitions and Strategic Moves
Tate & Lyle in 2024 acquired U.S.-based CP Kelco, gaining plant‑based products such as pectin and speciality gums derived from citrus peel and seaweed.
Ingredion's Share Performance and Timeline
Ingredion shares fell 2.8% on Thursday. It has until June 11 to make a firm offer or walk away, under UK takeover rules.
Historical Context and Previous Bids
In 2024, private equity firm Advent International was reportedly preparing a takeover offer for Tate & Lyle, but no bid materialised.
Tate & Lyle sold its sugar business to American Sugar Refining in 2010, ending its long association with refined sugar production, but it licensed the “Tate & Lyle Sugar” name to ASR to ensure the familiar brand remained on supermarket shelves.
Additional Information
($1 = 0.7399 pounds)
(Reporting by Yamini Kalia, Raechel Thankam Job and Prerna Bedi in Bengaluru; Writing by Yadarisa Shabong; Editing by Vijay Kishore and Hugh Lawson)
