Tate & Lyle to buy 51% equity interest in Chinese company
July 17, 2013
by Jeff Gelski
LONDON — Tate & Lyle, P.L.C. has signed an agreement with Xuzhou Yitong Food Industry Co., Ltd. to form a sino-foreign joint venture through the acquisition of a 51% equity interest in Jiangsu Howbetter Food Co. Ltd., a food systems business in China. Howbetter provides stabilizer systems and ingredient blends for customers across China, mainly those in the dairy and beverage categories.
Howbetter operates a blending facility in Suqian, China, and has application laboratories in the nearby city of Xuzhou. The business received a license to operate under new Chinese regulations put in place in 2010.
“The combination of Tate & Lyle’s global blending capabilities and recipe know-how with Howbetter’s strong local expertise and infrastructure provides us with an excellent platform on which to accelerate the growth of our food systems business in China,” said Olivier Rigaud, president of Specialty Food Ingredients for Tate & Lyle.
Tate & Lyle will acquire 22% of its equity interest from Xuzhou Yitong Food Industry and the balance of 29% from S.B. International, a subsidiary of a European-based global food business. Tate & Lyle has an option to acquire Xuzhou Yitong Food Industry’s remaining 49% equity interest in Howbetter at a later stage.
The transaction is subject to government approval, which is expected in the fall. The joint venture will be called Tate & Lyle Howbetter.
“Tate & Lyle and Howbetter are two highly complementary businesses with the same absolute focus on quality and customer service,” said Feng Guang, chairman of Xuzhou Yitong Food Industry, general manager of Howbetter and the person who will become general manager of Tate & Lyle Howbetter. “Together, we will be able to offer our customers in China a significantly enhanced range of products and technical expertise.”