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Owner of Primark, AB Foods offers to buy Illovo sugar stake for 5.6b rand
[JOHANNESBURG] Associated British Foods Plc increased its offer to buy Illovo Sugar Ltd, valuing the African producer at 11.5 billion rand (S$1.02 billion) and expanding the UK company's sugar business.
AB Foods, which already owns 51 per cent of Mount Edgecombe, South Africa-based Illovo, offered 25 rand a share for the portion it doesn't already own, according to a Friday statement.
The London-based owner of Kingsmill bread and discount clothing retailer Primark offered 20 rand a share in February. AB Foods would pay 5.6 billion rand for the shares, the companies said in a separate statement.
A buyout of Illovo would bolster AB Foods' portfolio of sugar businesses, which include operations in the UK, Spain and China. Over the past two years, the company's profits from the commodity have dwindled as prices fell.
"Africa is a growth market for sugar, driven by increasing populations and rising incomes," the companies said.
"Illovo is well-positioned to capitalize on this growth. Full ownership will accelerate Illovo's progress in these areas."