Associated British Foods To Buy 48.65% Stake In Illovo Sugar
Associated British Foods plc (ABF.L) said that it has reached agreement with the Board of Illovo Sugar Limited to acquire the 48.65% interest in Illovo that it does not already own. The agreed offer price per share is rand 25 representing a total consideration of rand 5.6 billion or 262 million pounds to be settled in cash. ABF acquired its majority shareholding in Illovo in 2006.
Illovo is listed on the Johannesburg Stock Exchange and is the largest sugar producer in Africa.
Africa is a growth market for sugar, driven by increasing populations and rising incomes. Illovo is well positioned to capitalise on this growth although high global sugar stocks, low world sugar prices and forthcoming changes to the EU sugar regime have created a challenging trading environment. AB Sugar has a strong track record of commercial development and delivering performance improvement programmes and believes that full ownership will accelerate Illovo's progress in these areas.
The transaction is expected to be immediately earnings accretive for ABF.
The transaction is expected to be implemented by way of a scheme of arrangement, which is subject, among other things, to Illovo minority shareholder approval, which will be sought at an extraordinConsumer Goodsary shareholder meeting of Illovo in May.
Illovo shareholders representing a majority of the Illovo shares not owned by ABF have provided undertakings to vote, or to recommend to their clients to vote, in favour of the scheme of arrangement.
Furthermore, Illovo directors who own shares in Illovo have agreed, in principle, to vote in favour of the proposed transaction. (dpa)
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