U.S. food ingredients maker Ingredion (INGR.N) is currently engaged in discussions with its British counterpart, Tate & Lyle (TATE.L), regarding a potential takeover. The proposed deal, valued at approximately £2.74 billion ($3.7 billion), was announced by the London-listed firm on Thursday, causing its shares to surge by 55%. Tate & Lyle is a British food ingredients company, recognised for its artificial sweeteners used in products like Coca-Cola drinks and supplying major food companies globally. Ingredion, based in the United States, is also a prominent maker of food ingredients.
Under the terms of the proposal, Tate & Lyle shareholders would receive up to 615 pence per share, comprising 595 pence in cash and a further 20 pence in dividends. This represents a significant 64% premium to Tate & Lyle’s closing price on Wednesday. The company’s shares climbed to as much as 580 pence, reaching their highest level in nearly a year. Lucinda Guthrie, head of Mergermarket, noted that this disclosure would act as a “price discovery mechanism” to determine if a deal could be finalised.
A successful transaction between the two companies could create a food and beverage ingredients giant worth over $10 billion, aligning with increasing consumer demand for low-calorie diets and plant-based options. Both firms have faced headwinds recently; Tate & Lyle has seen declining revenue and profit amidst weak U.S. bakery demand and rising costs, while Ingredion has experienced softer demand for its legacy products. In response to market shifts, Tate & Lyle acquired U.S.-based CP Kelco in 2024, expanding its portfolio of plant-based products. Ingredion’s shares fell 2.8% following the announcement. Under UK takeover rules, Ingredion has until June 11 to either make a firm offer or withdraw its interest. Private equity firm Advent International was also reportedly preparing a takeover offer for Tate & Lyle in 2024, though no bid materialised.
