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”.
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