Associated British Foods (ABF) has reached a preliminary agreement with Ebro Puleva that will see it acquire Azucarera Ebro, the sugar business of the Spanish food group.
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Ebro Puleva will receive a total consideration of EUR526m (US$664m) for the business, consisting of a payment of EUR385m from ABF and an additional EUR141m from third parties – principally the EU restructuring funds established under the CMO sugar reform.
Ebro will also incorporate 200 hectares of land – valued at about EUR42m – into its real estate portfolio.
Azucarera Ebro will be integrated into British Sugar, the sugar unit of ABF.
British Sugar is present in nine countries across Europe, Southern Africa and China. A source close to the situation told just-food that the deal represents a strategic opportunity to strengthen ABF’s European business.
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By GlobalData“The transaction… is very positive for the future of the beet and sugar sector in Spain, since Azucarera Ebro will be joining the second-largest sugar producer in the world,” Ebro said in a statement this morning (20 November).
The agreement remains subject to the execution of the “necessary legal contracts”, Ebro said. This is expected to be completed in a matter of weeks.
It is also subject to anti-trust approval, which, Ebro said, could be granted before the end of April next year.
“For the Ebro Puleva Group, this transaction will represent a leap forward in its current strategic plan, geared essentially towards focusing its efforts and resources on its key businesses (rice, pasta, dairy and functional foods), shedding non-strategic businesses, reducing its debt and optimising overheads,” Ebro Puleva said.
