Tate & Lyle, a world leader in sugar, cereal sweeteners and starches, today announced that it has agreed to sell its wholly-owned Australian sugar business, Tate & Lyle Bundaberg ("Bundaberg"), and associated businesses, to Belgium-based Societe Financiere des Sucres s.a. ("Finasucre"). The consideration is A$425 million ((pound)162 million), debt free, subject to adjustments. Of this, A$144 million ((pound)55 million) will be paid in cash at completion. The balance is being satisfied by a mixture of the assumption and repayment of debt and accrued interest by Finasucre of A$141 million ((pound)54 million), subject to adjustment, and the payment of pre-completion dividends.

Headquartered in Brisbane, Bundaberg is the third largest cane miller in Australia, operating from seven mills, and is also a significant sugar refiner and a major cane grower.

Included in the sale are: Bundaberg's raw sugar and sugar refining business; a 50% interest in Bundaberg Rum, which is operated in partnership with United Distillers and Vintners (Australia) Limited (a subsidiary of Diageo plc); and Bundaberg's engineering business, Bundaberg Foundry Engineering Limited.

The value at March 25, 2000 of net assets to be sold was A$342 million ((pound)130 million). This figure excludes the A$141 million ((pound)54 million) of debt within Bundaberg which will be assumed by Finasucre and forms part of the consideration.

Profit before tax attributable to these net assets (including debt) in the 12 months to March 2000 was (pound)2 million.

Goodwill arising on the acquisition of Bundaberg was written off to Group reserves in 1991. (pound)12 million of this goodwill has now been written back and taken as an exceptional loss in the Group profit and loss account for the 18 months to March 2000. The excess of the consideration over net asset value will enhance Tate & Lyle shareholders' funds on completion of the transaction.

The sale of Bundaberg is conditional on approval (or no objections being received) from the Australian Treasurer under the Foreign Acquisitions and Takeover Act 1975 (Commonwealth of Australia). This condition is expected to be met within one month.

Proceeds of the sale will be used to reduce Group debt.

Finasucre has also made an offer to acquire the Group's interest in Vietnamese cane sugar producer, Nghe An Tate & Lyle Sugar Company ("NAT&L"). Tate & Lyle will review this offer with its partners and the financiers to NAT&L. The offer is subject to the achievement by NAT&L of throughput targets which are expected to take up to three years to attain.

Finasucre is a privately-owned holding company operating beet sugar factories and producing lactic acid in Belgium. The company also owns a cane sugar estate in Africa.

Larry Pillard, Tate & Lyle Chief Executive said:

"The sale of Bundaberg is an important step in enhancing the focus of Tate & Lyle on activities that add value to carbohydrates. Along with other recent disposals it underlines our determination to realize value for Group shareholders.

When Tate & Lyle bought Bundaberg in 1991, it was expected that future deregulation of the Queensland sugar industry would facilitate fuller integration of Bundaberg's operations with other Group businesses.

However, the recently introduced Queensland Sugar Industry Act 1999 continues to require that all raw sugar produced in Queensland is purchased and sold by a central organization. It therefore seems unlikely that the enhanced returns and value added benefits available from vertical integration would be easily accessible in the near future.

Consequently we have decided that this is an appropriate opportunity to sell Bundaberg. In doing so we acknowledge the valuable support and commitment of Bundaberg's management team and employees to Tate & Lyle since 1991."

Olivier and Paul Lippens, Managing Director and Director, respectively, of Finasucre, said:

"The acquisition of Bundaberg is consistent with our objective of investing in high quality assets in areas of strategic importance in the world sugar market. This is a long-term investment for us and we look forward to supporting Bundaberg's management and employees in the future development of the business."

The Tate & Lyle Group, with headquarters in the UK, operates in over 50 countries with revenues of over (pound)4 billion. It produces and processes sugar from cane and beet, and processes cereals (predominantly maize and wheat) into sweeteners and starches and other products. US operations include A E Staley Manufacturing and Tate & Lyle Citric Acid, Decatur, IL; PM Ag Products, Chicago, IL; Western Sugar, Denver, CO; and Domino Sugar, New York.

Tate & Lyle ordinary shares trade on the London Stock Exchange and may be accessed on Bloomberg under the symbol Tate LN, on the Reuter Equities 2000 Service under TATE.L and on Quotron under TATEU.EU. In the US its ADRs trade on the NASD OTC Bulletin Board under TATYY (each ADR is equal to four ordinary shares).