Tate & Lyle Acquires CP KELCO for $1.8 Billion to Strengthen Plant-Based Portfolio

Tate & Lyle, a British sweetener manufacturer, announced the acquisition of US-based CP Kelco for $1.8 billion. This strategic move is intended to boost Tate & Lyle's specialty ingredients business to meet the growing demand for plant-based products.

The acquisition transaction includes $1.15 billion in cash and the issuance of 75 million new Tate & Lyle shares to CP Kelco's parent company, JM Huber Corporation. The transaction will make JM Huber the largest shareholder of Tate with a 16% stake and the right to appoint two non-executive directors to Tate's board of directors. CP Kelco, known for its pectin, specialty gum and other natural ingredients, has recently faced declining sales and margin pressures, sparking investor concerns. The proposed transaction is expected to generate at least $50 million in cost benefits by the end of the second fiscal year after completion.

The acquisition is in line with Tate & Lyle's strategy to meet growing consumer demand for sustainable plant-based products and fewer artificial additives. Chief Executive Officer Nick Hampton stressed that the deal would help the company meet the growing market for sustainable ingredients.Despite the strategic fit, Tate & Lyle’s shares fell more than 8%, reflecting investor concerns about CP Kelco’s recent performance.