Food ingredients group Tate & Lyle is to sell its molasses business to UK grain importer W&R Barnett for GBP67m (US$105.6m).
The business comprises the global molasses trading desk based in London and other worldwide marketing operations together with UK third-party storage operations. It had external sales of GBP228m and made an operating profit of GBP13m in the year to 31 March 2010.
The sale excludes historic UK pension assets and liabilities and, after costs and subject to movements in exchange rates, is expected to give rise to “a small book profit on disposal”.
The proceeds from the deal will be used to reduce Tate & Lyle’s net debt.
Javed Ahmed, chief executive of Tate & Lyle, said: “I would like to thank our molasses employees for their hard work and commitment over many years, and wish them every success in the future.
“Tate & Lyle’s clear priority is to grow its speciality food ingredients business, supported by cash generated from bulk Ingredients. This disposal represents another important step as we focus, fix and grow our business,” he added.
Completion is conditional on employee consultation and is expected to occur in the next few weeks.
In July, Tate & Lyle disposed of its EU sugar refining operations and announced its intention to launch processes to sell the remaining businesses within its sugars division, principally molasses and Vietnamese sugar. The sale of the Vietnamese sugar business is “progressing to plan”, the firm said.