Associated British Foods interested in buying remaining stake in Illovo Sugar

Associated British (AB) Foods has made a non-binding expression of interest in South Africa-based Illovo Sugar to buy the rest of the shares it does not own in the company.

Associated British Foods holds a 51.35% stake in Illovo, which it bought in 2006.

According to Illovo Sugar, AB Foods intends to offer the African sugar producer £0.8593 (ZAR20) per share.

The deal is worth £176.16m (ZAR4.1bn) and AB Foods plans to make a cash offer to all other shareholders, Illovo Sugar was quoted by Reuters.

Illovo has been reducing costs to meet low sugar prices.

AB Foods finance director John Bason was quoted by Reuters saying: "Illovo certainly faces challenges, no doubt about that, but these are not new challenges. We take a long term view."

The acquisition of Illovo Sugar is expected to boost AB Foods’ portfolio of sugar businesses that operate in countries, including Spain, China and the UK.

Bason was quoted by Bloomberg Business saying: "The African sugar market is an attractive market where consumption is growing.

"We are the perfect home for Illovo."