Tate & Lyle to offload its sweeteners division
Former sugar producer Tate & Lyle is exploring the sale of the part of the firm that produces sweeteners, to focus on its fast-growing food and beverage division.


Shares in Tate & Lyle bounced this week after the 162-year-old company said that it is exploring the sale of a controlling stake in the largest part of the firm, says Hari Govind on Bloomberg. “One of Europe’s leading sugar producers” until it sold that business in 2010, Tate & Lyle has since focused on food ingredients, including sweeteners, with this division generating £1.8bn in sales last year, around 60% of total revenue.
Good news, says Lex in the Financial Times. While the production of sweeteners is a “steady cash generator”, demand for them is gradually falling thanks to the growing awareness about their role in obesity. The sweetener business is also obscuring Tate & Lyle’s “fast-growing” food and beverage division, especially its “speciality ingredient” business, which helps food manufacturers replace sugars and fats with “healthier alternatives”. Selling the sweetener should therefore raise cash that could be reinvested in the company or used for acquisitions, as well as improving the group’s standing with “socially conscious investors”.
But a sale “is not without risk”, says Graham Ruddick in The Times. The group’s two main businesses are “deeply intertwined”, with its US factories making products for both divisions. There is also the risk that the move could create tax problems as it currently enjoys a “lower tax rate in the US thanks to its ability to offset UK losses and US profits”. Tate & Lyle will also need to get a good price, with analysts suggesting that it should aim for £1.2bn to make the deal worthwhile.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.
He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.
Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.
As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.
Follow Matthew on Twitter: @DrMatthewPartri
-
Halifax: House prices rose 0.3% in August, marking third increase in a row
The average UK property now costs £299,331, a new record high. But could the Autumn Budget derail the housing market?
-
Rayner quits over stamp duty controversy: should the tax be abolished?
Angela Rayner has relinquished her deputy prime minister role, but does ‘Rayner-gate’ flag how unfair the stamp duty land tax rules are in the first place?
-
Emerging market stocks deliver strong growth at a bargain
Emerging markets offer access to some of the world’s most compelling investment themes – here's how to gain exposure
-
Why MoneyWeek likes investment trusts
Investment trusts offer benefits that other forms of fund cannot match, says Rupert Hargreaves
-
Law Debenture’s portfolio should deliver strong returns from unloved stocks
Law Debenture is a unique trust with a value-focused strategy that is doing well despite the weak UK economy
-
European bank stocks bounce back
Opinion European bank stocks were part casualty and part cause of Europe’s lost decade. Now it’s clearly turned the corner, says Cris Sholto Heaton
-
Are wealthy whisky enthusiasts leaving Britain?
Collectables Wealthy whisky enthusiasts are heading to tax-friendly countries such as Dubai, where there is more disposable income to spend on collectable luxuries like rare whisky.
-
'The rise and fall of Kodak is a lesson for the tech giants'
Opinion The long decline of Kodak – a once-dominant company – shows why no business is safe from disruption, says Matthew Lynn
-
8 of the best properties for sale with kitchen gardens
The best properties for sale with kitchen gardens – from a 17th-century timber-framed hall house in Norfolk, to an Arts & Crafts house in West Sussex designed by Charles Voysey with a garden by Gertrude Jekyll
-
Why investors can no longer trust traditional statistical indicators
Opinion The statistical indicators and data investors have relied on for decades are no longer fit for purpose. It's time to move on, says Helen Thomas