Tate & Lyle to Sell Sugar Stakes

Tate & Lyle, the London-based food ingredient giant, has agreed to sell its minority stakes in Middle Eastern sugar units to Savola Group, its Saudi-based partner and the Middle East's biggest sugar refinery.

According to information reported in FlexNews, Tate & Lyle currently owns (soon to not own) "a [9.68] percent stake in a 1.2 million tonnes per year sugar refinery in Saudi Arabia and a [3.58] percent stake in a 750,000 tonnes per year sugar refinery in Egypt."

At present, Savola Group holds "a 64.8% stake in the Saudi sugar refinery and a 53.5% stake in the Egyptian refinery."

On the authority of a Middle-Eastern executive who chooses to remain anonymous,

"Tate & Lyle wants to sell because they are dis-engaging from sugar refining and focusing on sweeteners, ethanol and starches.

"We are interested because it suits our strategy of buying minority interests from willing partners in firms where we are the majority owners.

"We are in talks with Tate & Lyle and we hope to close a deal by mid-January."

The price of this sugar sale has not yet been reported, but financial services firm, Shuaa Capital (a Dubai-based company on the Kuwait Stock Exchange and prominent player in the Gulf Cooperation Council [GCC]) claims it could be worth 240 million riyals, which equates to roughly $64 million.

It's also reported that Savola Group has collaborated with Turkish and Saudi partners to bid on several sugar mills for sale by the Turkish government.

Comments from Tate & Lyle representatives weren't included in these linked articles.

This deal will end a 14 year business relationship between Savola Group and Tate & Lyle, but seems to be aligned with the future plans and goals for each of these distinguished companies.

Of course, Tate & Lyle will continue to focus its efforts on starches, sweeteners, and ethanol: quality food ingredients that we love.