France’s Tereos has bought UK-based Real Good Food’s sugar division, Napier Brown for £34 million in anticipation of the 2017 loosening of the EU’s sweetener regulations.
The sale of Napier Brown, which controls more than a 20% share of the UK sugar market and owns the Whitworths brand, comes after a difficult period for the division, and pushed share values for Real Good Food to a 13 month high in London.
Real Good Food says that the sale of Napier is an advance action prior to the 2017 elimination of EU sugar production quotas, which the company says will have ‘profound implications’ for the European industry.
After Tate & Lyle exited the industry reducing volumes, Napier’s role in ensuring imports and adequate supply will be key, and in order to secure a supply of sugar, the directors believe that the division would operate best being integrated with a sugar producer.
The acquisition is a good fit for Tereos which is the largest sugar group in France and the fifth largest in the world. It processes sugar from cane, beets, and cereals and produces starches and ethanol, and plans to increase its output by 20% upon the lifting of EU quotas. Having control of Napier Brown will not only offer an outlet for its increased production, it will also strengthen its standing in its strategic UK market.
To receive relevant news stories with summaries provided by GAI News, subscribe to daily or weekly service.