Danisco, the Denmark-based ingredients group, has sold its sugar business to Germany's Nordzucker.

The deal, announced last night (14 July), ends months of speculation over the future of the business after Danisco announced in March that it would look to de-merge or sell the unit.

Nordzucker, which has been keen to take part in the consolidation in sugar in the wake of reform to the sector in the EU, has agreed to pay DKK5.6bn (US$1.2bn) for the business.

Under the agreement, Danisco will also receive DKK600m from the sale of the company's EU quota for 2007/08.

Danisco said the sale had transformed the company into a "focused, bio-based, market-driven ingredients provider".

"This divestment marks the beginning of a new era for Danisco," CEO Tom Knutzen added.

Nordzucker CEO Hans-Gerd Birlenberg said the two companies were "strategically excellently-matched".

He added: "We are gaining a partner which is in excellent all-round shape and which will strengthen our operations substantially right from day one."