ABF buys remaining share in Illovo for £262M

ABF acquired the majority shareholding in Illovo in 2006 and has now purchased the remaining 48.65%. The deal is subject to shareholder approval, which is expected in May.

Illovo is listed on the Johannesburg Stock Exchange and is the largest sugar producer in Africa. It has leading market positions in South Africa, Malawi, Zambia and Swaziland and a strong presence in Mozambique and Tanzania.

The agreed offer price per share is 25 South African Rand (Ra25) representing a total consideration of Ra5.6bn (£262M) to be settled in cash.

Valuation expert​

ABF said the agreed offer price is in line with the “preliminary fair and reasonable opinion”​ provided by the independent valuation expert retained by the Board of Illovo, Rand Merchant Bank, a division of FirstRand Bank. 

In a statement ABF said: “Africa is a growth market for sugar, driven by increasing populations and rising incomes. 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.​

‘Improvement programmes’​

“AB Sugar has a strong track record of commercial development and delivering performance improvement programmes and believes that full ownership will accelerate Illovo’s progress in these areas.”​

ABF is an international food, ingredients and retail group, with sales of £12.8bn and 124,000 employees in 48 countries. It has significant businesses in Europe, southern Africa, the Americas, China and Australia. It operates in five business segments: sugar, agriculture, retail, grocery and ingredients.

For the year ending March 31 2015, Illovo generated an operating profit of Ra1,655M (£77M) on sales of Ra13.3bn (£619m).