Tate & Lyle agrees to £1.4bn acquisition of CP Kelco

The deal with current owner Huber is worth $1.8bn (approximately £1.4bn) and forms part of wider “strategic transformation”​ at Tate & Lyle.

CP Kelco is a leader in pectin and speciality gums, with Tate & Lyle stating that the deal strengthens its expertise across three core platforms of sweetening, mouthfeel and fortification.

On 23 May 2024, the global F&B ingredients firms announced the sale of Primient for $350m​​, a move which also signalled at the firm’s desire to shift its approach.

According to Tate & Lyle, the proposed transaction is “expected to drive stronger revenue growth and significant adjusted EBITDA margin improvement over the next few years”.​

Huber will also take a 16% stake in Tate & Lyle and will be entitled to appoint two non-executive directors to the board.

Acceleration of growth strategy

Commenting on the proposed deal, Tate & Lyle chief executive Nick Hampton said: “A combination with CP Kelco is the perfect fit with Tate & Lyle’s growth-focused strategy and purpose. It significantly strengthens our sweetening, mouthfeel and fortification platforms, enhances our solutions capabilities across our four core categories, and unlocks new growth opportunities. Together, we will have a compelling customer proposition.​

“Following on from the announcement of the proposed sale of our remaining interest in Primient last month, the proposed combination with CP Kelco represents a significant acceleration of our growth-focused strategy.​

“It creates a leading, global speciality food and beverage solutions business, ideally placed to benefit from the structural trends towards more plant-based, clean-label and sustainable ingredients and solutions. The growth potential of the proposed combined business is significant and we look forward to the future with confidence and excitement.”​

Unlocks value of CP Kelco

Meanwhile, Huber president and CEO Gretchen W. McClain said that along with Tate & Lyle, the firm was taking a “bold and strategic”​ step.

“Huber has been an excellent steward of CP Kelco for the past 20 years with a relentless pursuit to growing and creating value as a leading provider of nature-based, specialty ingredient solutions,”​ McClain explained.

“This step unlocks the full value of CP Kelco and our long-term partnership as a shareholder in Tate & Lyle signifies Huber’s long-term desire to remain engaged in the attractive food and beverage market. Our collective rich histories and depth of experience combined with our shared purpose, values and commitment to our customers, employees, and communities will enhance future value for all stakeholders.”​

In other news, Food Manufacture looks at what’s next for the alternative proteins category.​​