Tate & Lyle Agrees £2.7bn Takeover by Ingredion in Blow to London Market

The £2.7bn Takeover Deal

Tate & Lyle has agreed to a £2.7bn takeover by its US rival Ingredion, in a deal that could put hundreds of jobs at risk and represents yet another loss for London's struggling stock market. The FTSE 250 business, which makes artificial sweeteners such as Splenda, has agreed to a deal that values it at 615p per share, about 60% above its price before news of a possible takeover emerged.

Workforce Reduction and Company Background

The companies said the deal could trigger a "material reduction" in Tate & Lyle's workforce, representing 3%, or about 475 jobs, of the new group's headcount. Any such workforce reduction would be implemented with the aim of combining the strengths and capabilities of both businesses, they said in a joint statement.

Tate & Lyle, which is one of the oldest listed companies in the UK, employs just under 5,000 people around the world. About 200 employees are in the UK, most of whom operate from its headquarters in London. Ingredion, which is headquartered in Chicago, Illinois, employs about 11,000 people worldwide.

Financial Impact of the Merger

The takeover comes at a low point for Tate & Lyle's share price, which, prior to news of the deal, had lost more than half of its value in just five years. Ingredion said its new combined group would generate annual revenue of about $9.9bn (£7.4bn) and make adjusted profits of $1.8bn. Shares in Tate & Lyle rose by as much as 12% to 552p in early trading.

London Stock Market Suffers Another Blow

The takeover also represents yet another loss for London's stock market, which has suffered a series of high-profile exits in recent years. Several London-listed companies have agreed to take-private deals this year, including the asset manager Schroders, insurer Beazley and laboratory testing company Intertek.

Future Outlook for the Combined Entity

The Tate & Lyle chair, David Hearn, said the company's "next chapter with Ingredion will create a business with even greater potential, greater scale, and increased investment in innovation in support of customers." Jim Zallie, the chair and chief executive of Ingredion, said: "Combining Ingredion and Tate & Lyle's complementary portfolios creates a global leader in ingredient solutions with the expertise and geographic reach to help shape the future of food."