David Prosser: A much sweeter deal than Cadbury
Friday 02 July 2010
Outlook It is not difficult to see why American Sugar Refining, the US company that is buying up Tate & Lyle's sugar-refining business, moved so quickly yesterday to promise that the transaction would not lead to job losses at the unit's east London facilities. No doubt it wanted to reassure the 550 Tate & Lyle staff who will transfer it to its employment, but more importantly it will have been desperate to ensure that this deal is not portrayed as a rerun of the Kraft versus Cadbury affair.
The parallels are striking. An American company is buying an iconic British brand with a rich history and some strong philanthropic associations. It is just the sort of deal those who opposed the Cadbury takeover should be getting hot under the collar about all over again, even if this is a transaction that Tate & Lyle itself wants, rather than a hostile takeover.
ASR's commitment on jobs notwithstanding – and the unions will need to hold them to account for it – this is a deal that will raise a few eyebrows. Golden Syrup, officially the world's oldest brand, will be lost from British ownership, for goodness' sake.
Still, just to give the eyebrows a break, it's worth making the point that Tate & Lyle's decision to sell this business may actually be the key to ensuring it survives as an independent British company with real growth prospects. Its decision to focus on the higher-margin speciality food market could prove to be the natural evolution that all companies must go through unless they want to share the fate of the dinosaurs.
Think not of the sale as losing one of this country's favourite sons, but as gaining a stronger one, you might say. And anyway, there's no reason to think the assets being sold won't prosper better under the ownership of a company that is devoted to the refinery business, and that has been looking for a European presence to add to its global footprint for some time.
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