Associated British Foods acquires interests from one of the largest sugar producers

Associated British Foods plc (“ABF”) has announced that it reached an agreement to acquire the 48.65% interest in Illovo that it does not already own, after it acquired its majority shareholding in 2006. 

The agreed offer price per share is rand 25 representing a total consideration of rand 5.6bn (GBP 262m) to be settled in cash. 

Illovo is listed on the Johannesburg Stock Exchange and is the largest sugar producer in Africa.  It is one of the world’s lowest cost producers, with leading market positions in South Africa, Malawi, Zambia and Swaziland and a strong presence in Mozambique and Tanzania.

Africa is a growth market for sugar, driven by increasing populations and rising incomes.  Illovo is well positioned to capitalise on this growth although high global sugar stocks, low world sugar prices and forthcoming changes to the EU sugar regime have created a challenging trading environment.