The Associated British Foods (ABF) and Illovo have entered into a transaction implementation agreement with ABF making an intention to buy all of Illovo's issued shares. The two companies made an announcement through SENS.
ABF is offering shareholders R25 apiece. "Illovo has undertaken that it will not declare or pay any distribution until the proposed transaction is implemented or fails,” read the statement.
Illovo is Africa’s largest sugar producer and has extensive agricultural and manufacturing operations in six African countries.
ABF is a diversified international food, ingredients and retail group with significant businesses in Europe, Southern Africa, the Americas, China and Australia.
“Africa is a growth market for sugar, driven by increasing populations and rising incomes,” said the two companies through a SENS statement.
“Illovo is well positioned to capitalise on this growth, although, high global sugar stocks, low world sugar prices and forthcoming changes to the EU sugar regime have created a challenging trading environment.”
Associated British Foods says it believes, through its strong track record, will accelerate Illovo’s progress in these areas.