Associated British Foods, the UK-based food, ingredients and retail group, today [Thursday] announced the acquisition of the international yeast, bakery ingredients and US herbs and spices businesses from Burns, Philp & Company of Australia for US$1,350m, subject to regulatory approvals.

The consideration will be paid in cash from existing resources and new facilities at completion. There will be a closing adjustment to account for changes in working capital.

The combined businesses had a profit of US$129m on turnover of and sales of $708m in the year ended June 2003 and net tangible assets at 30 June 2003 of $393m.

Peter Jackson, ABF chief executive, commented : "These businesses are a perfect fit for ABF. They have a significant presence in growing markets, strong market positions and are cash generative. The broad international footprint will be an excellent platform for further growth."

The units involved in the deal hold a robust market position, including market leadership in bakers' yeast in North and Latin America and Asia, and third place in Europe. They are also number two in herbs and spices in the US.

Spread across 45 operations in 24 countries, the acquisition will broaden ABF's international scale, notably in the fast growing markets in Asia , especially China.

The market for baker's yeast is growing at an overall 3-4%; 1-2% in developed countries but much faster in many developing countries such as China , where the growth rate is over 10%. In addition the worldwide bakery ingredients market is growing at 5% per annum and the US herbs and spices market at 3% per annum.