A.B.F. agrees to acquire Ebro Puleva sugar business
November 24, 2008
by Eric Schroeder
LONDON — Associated British Foods has reached an agreement in principle to acquire Azucarera Ebro S.L.U., the Spanish sugar business of Madrid-based Ebro Puleva.
While A.B.F. confirmed the talks, it said "there can be no certainty that a binding agreement will be concluded."
Ebro Puleva, meanwhile, said the necessary contracts should be completed within the next several weeks. The company also provided further details on the potential sale, listing the total consideration of the transaction at €526 million ($675 million), consisting of €385 million ($494 million), debt free, from A.B.F., and €141 million ($181 million) from third parties.
Under the agreement, Ebro Puleva said it would incorporate more than 200 hectares (494 acres) of land classified for various uses into its real estate portfolio.
"The transaction, which concludes a process began by the board of directors in May 2008 and ratified by the general shareholders meeting one month later, is very positive for the future of the beet and sugar sector in Spain, since Azucarera Ebro will be joining the second-largest sugar producer in the world," Ebro Puleva said. "British Sugar, with a global production of 4 million tones a year, is present in nine countries across Europe, Southern Africa and China. Moreover, back in April 2008, British Sugar and Azucarera Ebro entered into a contract for the future supply of raw sugar to the new refinery in Guadalete through Illovo Sugar Ltd., part of the British Sugar Group."
Ebro Puleva added that the transaction represents "a leap forward" in its current strategic plan, which currently is focused on growing rice, pasta, dairy and functional foods, while shedding non-strategic businesses and reducing debt.