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Tate & Lyle PLC on Monday recommended an acquisition bid from US peer Ingredion Inc at a £3.8 billion enterprise value. The London-based maker of food and beverage ingredients said it had received a cash offer for 595 pence per share, plus dividends. Consequently, the cash offer values Tate & Lyle’s equity at £2.7 billion and is about a 60% premium to the company’s closing share price of 374.80p on May 13, the day before the offer period began. The offer price implies an enterprise value of £3.7 billion, including debt. In addition, Tate & Lyle shareholders will be eligible to receive a final dividend for the year ended in March of up to 13.2p per share and an interim dividend for the first half of financial 2027 of up to 6.8 per share. Assuming dividends are paid in full, the Ingredion offer values Tate & Lyle at 615p per share, about 64% higher than the May 13 closing share price, or £2.8 billion in total, and implies an enterprise value of £3.8 billion. It comes with the unanimous recommendation of Tate & Lyle directors, and commitments from shareholders holding 17.1% the company’s shares, to vote in favour of the takeover. Ingredion in May confirmed it made a non-binding indicative offer for Tate & Lyle valuing it at a maximum of 615 pence per share. It had until Thursday to confirm its intention to make a firm offer. Based in a Westchester, Illinois, Ingredion is a food and beverage ingredient supplier focused on starches and sweeteners. Ingredion previously had made an unsolicited offer for 530p per share, which Tate & Lyle had said undervalued the company. Tate & Lyle shares rose 11% to 543.04 pence on Monday morning in London, giving it a market capitalisation of £2.46 billion. Ingredion closed 0.5% higher at $99.98 on Friday in New York for a market cap of $6.30 billion. The sweetened offer comes during a challenging period for Tate & Lyle, which acknowledged in May that its recent performance had been ‘disappointing’. Reported revenue grew 16% to £2.01 billion in the financial year that ended March 31 from £1.74 billion in financial 2025, but adjusted revenue slipped 3%. Tate’s adjusted performance was presented as if CP Kelco was acquired at the start of financial 2025. The firm completed the acquisition of nature-based ingredients firm CP Kelco for $1.8 billion in November 2024. Reported pretax profit jumped 49% to £131 million from £88 million, but adjusted pretax profit fell 5% to £238 million, while adjusted earnings before interest, tax, depreciation and amortisation fell 3% to £415 million. At the time, Tate & Lyle had cited subdued demand and tough trading conditions for the downturn, a sentiment it reiterated on Monday. ‘While actions are being taken with urgency to return the business to top-line growth, the continuation of the current challenging market environment creates risks and uncertainties in the timing of delivery of Tate & Lyle’s financial algorithm,’ it noted. In financial 2027, the company expects to report ‘modest revenue growth’ and broadly flat Ebitda before the estimated $20 million impact from ‘the rescheduling of the consolidation of bio-gums capacity’. This guidance assumes ‘a limited impact from the conflict in the Middle East’. For Ingredion’s part, it sees Tate & Lyle as ‘a compelling opportunity, with potential to scale business in North America, Europe and emerging markets. The enlarged company will have about $9.9 billion in revenue and $1.8 billion in adjusted Ebitda, Ingredion said. The deal is expected to generate cost savings of $130 million, which will be fully realised by the end of 2030. One-off costs to achieve these synergies, however, are estimated at $175 million. Tate & Lyle Chair David Hearn commented: ’Over the last few years, Tate & Lyle has been successfully repositioned as a leading global speciality food and beverage solutions business aligned to growing consumer demand for healthier, more nutritious and sustainable food and drink. ‘Looking forward, we believe the next chapter with Ingredion will create a business with even greater potential, greater scale, and increased investment in innovation in support of customers. The board of Tate & Lyle believes Ingredion’s offer represents an attractive opportunity for shareholders to crystallise value in cash, and that it will be an excellent steward of Tate & Lyle.’ Ingredion Chair & Chief Executive Jim Zallie added: ‘The combined business will be better positioned to serve customers’ needs for the development of great-tasting, healthier and affordable food products that consumers demand.’ Copyright 2026 Alliance News Ltd. All Rights Reserved.
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