The privately-owned US group is buying Tate’s sugar and Golden Syrup business with a perpetual license to use the Tate & Lyle name, while Tate said on Thursday it will focus on its sweeteners such as Splenda and its industrial starches.
The British sugar maker’s roots go back to 1859 when Henry Tate started refining, then introduced the sugar cube to Britain in 1875, and his legacy lives on after he bequeathed his paintings to form the nucleus of London’s Tate Britain gallery.
Tate’s new Chief Executive Javed Ahmed sparked talk of a sale of its underperforming sugar operations in May when he promised to focus on its super sweetener Splenda and corn-based sweeteners and starches largely made in the United States..
Tate shares were up 2.7 percent to 462.1 pence at 1029 GMT in a lower London market as analysts welcomed its exit from a low profits business and after it gained a higher than expected price for a commodity business subject to big world sugar price swings.
“We see the move as positive as it offers a cash injection and a move away from commoditized businesses,” said analyst Dirk Van Vlaanderen at Jefferies International, while Graham Jones at Panmure Gordon said it was a very welcome move at a good price.
Henry Tate opened his Silvertown refinery on the River Thames in East London during 1878 and join with Scottish-born Abram Lyle in 1921 to form Tate & Lyle after Lyle started producing his Golden Syrup in 1885 close to Tate’s refinery.
Lyle refined his product from a treacly syrup that usually went to waste from sugar cane refining and now more than one million tins of the Golden Syrup leave the Plaistow plant each month in distinctive green and gold Victorian-style tins.
