ASBFY Associated British Foods Plc (PK)

TIDMABF

RNS Number : 5620U

Associated British Foods PLC

08 April 2016

8 April 2016

Associated British Foods plc

Acquisition of Illovo minority interest

Further to the announcements on 8 February and 18 March 2016, Associated British Foods plc ("ABF"), today announces that it has reached agreement with the Board of Illovo Sugar Limited ("Illovo") 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 5.6bn (GBP262m) 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. It is one of the world's lowest cost producers, with leading market positions in South Africa, Malawi, Zambia and Swaziland and a strong presence in Mozambique and Tanzania.

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 agreed offer price is in line with the preliminary fair and reasonable opinion provided by the independent valuation expert retained by the Board of Illovo, Rand Merchant Bank, a division of FirstRand Bank Limited. 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 extraordinary 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.

For further enquiries please contact:

Associated British Foods

John Bason, Finance Director

Flic Howard-Allen, Head of External Affairs

Tel: 020 7399 6500

African media

Aprio

Julian Gwillim

Tel: +27 82 45 24 389

UK & other media

Citigate Dewe Rogerson

Chris Barrie, Eleni Menikou

Tel: +44 20 7638 9571

Notes to editors:

 
 1.   ABF is a diversified international food, ingredients and retail 
       group with sales of GBP12.8bn and 124,000 employees in 48 countries. 
       It has significant businesses in Europe, southern Africa, the 
       Americas, China and Australia. It aims to achieve strong, sustainable 
       leadership positions in markets that offer potential for profitable 
       growth, and deliver quality products and services that are central 
       to people's lives. The group operates in five business segments: 
       Sugar, Agriculture, Retail, Grocery and Ingredients. 
 
 2.   AB Sugar, an operating division of ABF, is an industry leading 
       group in the international markets for sugar and sugar derived 
       co-products. It has operations in the United Kingdom, Spain, 
       southern Africa and China with an annual processing capacity 
       of some 5m tonnes of sugar and 600m litres of ethanol. 
 
 3.   Illovo Sugar Limited is Africa's biggest sugar producer and has 
       extensive agricultural and manufacturing operations in six African 
       countries. The group produces raw and refined sugar for local, 
       regional African and export markets from sugar cane supplied 
       by its own agricultural operations and independent outgrowers 
       who supply cane to Illovo's factories. High-value products, manufactured 
       downstream of the sugar production process, are sold internationally 
       into niche markets. Installed electricity generating capacity, 
       fuelled by renewable resources, provides 90% of the group's energy 
       requirements. For the year ending 31 March 2015, Illovo generated 
       an operating profit of rand 1,655m (GBP77m) on sales of rand 
       13.3bn (GBP619m). 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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April 08, 2016 02:26 ET (06:26 GMT)

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