The companies said yesterday (3 October) that Cristal Union has already secured an agreement to buy 51% of Vermandoise

The companies said yesterday (3 October) that Cristal Union has already secured an agreement to buy 51% of Vermandoise

French sugar refiner Cristal Union has struck a deal to buy local rival Groupe Vermandoise.

The transaction is set to create France's second-biggest sugar company, behind market leader Tereos. It will also form the fifth-biggest firm in Europe's sugar sector.

The companies said yesterday (3 October) that Cristal Union has already secured an agreement to buy 51% of Vermandoise. The move in turn means Cristal Union will attain 56.5% of Vermandoise subsidiary SSPLV.

The deal remains subject to consultation with Cristal Union and Vermandoise employees, as well as the approval of competition authorities in France and Germany.

Should those hurdles be cleared, Cristal Union will then launch a tender offer for the remaining shares in Vermandoise and SSPLV.

Cristal Union CEO Alain Commissaire said: "This is a milestone for our two groups, which will allow us to strengthen our position in Europe and therefore build a solid foundation for future developments."

The companies said the deal values Vermandoise at almost EUR1bn (US$1.33bn). They added that the combined group would have 2010/11 pro-forma revenues of EUR1.18bn and EBITDA of EUR225m. They also said the deal would not lead to any restructuring measures due to the "complementary" nature of the two companies' production sites.

Vermandoise CEO Jean-Claude Delloye said the combination of the two companies would "open new opportunities for growth in France and internationally".

Cristal Union president Olivier de Bohan is set to chair the combined company. Commissaire has been lined up as MD and will be "supported by the Vermandoise team", the companies added.