By Evie Liu
Ingredion is buying Tate & Lyle, bringing together two food-ingredients companies trying to turn better-for-you eating into better-for-investors returns.
The path ahead won't be easy. Food makers want more functional, better-for-you ingredients, but sluggish packaged-food demand -- as consumers watch every dollar they spend -- has made them more cautious buyers.
The U.S.-based Ingredion said Monday it had agreed to acquire Britain's Tate & Lyle in an all-cash deal valuing the company at about 2.7 billion pounds, or $3.6 billion. Tate & Lyle shareholders will receive 595 pence a share in cash, plus dividends of as much as 20 pence a share.
The price represents about a 59% premium to Tate & Lyle's closing price before the talks became public on May 14. Tate & Lyle stock surged at the time, and jumped another 15% on Monday after the formal deal announcement. Ingredion shares slipped 0.5% on Monday.
Both companies make the ingredients that sit quietly inside everyday packaged foods. Ingredion makes starches, sweeteners, texturizers, plant-based proteins, and other ingredients used by food, beverage, paper, and industrial customers.
Tate & Lyle, once best known for sugar, has remade itself into a supplier of sweeteners, fibers, stabilizers, and other ingredients that help packaged-food makers cut sugar, add texture, or improve nutrition.
Ingredion's sales have been falling as its customers order less of its core products amid weakening consumer demand. Lower raw-material costs have also hurt sales as Ingredion passed some savings onto customers. Profits were also squeezed by operational problems at one of its manufacturing plants.
Ingredion's higher-growth specialty ingredients business, including clean-label texturizers and health-focused products, is doing better, but it has not been enough to fully offset weakness in the older, more commodity-like parts of the business.
The stock has declined 28% over the past 12 months. Through the Tate & Lyle deal, Ingredion is buying scale, innovation, and a broader specialty-ingredients portfolio, betting on demand for ingredients that help make food products healthier, cheaper, and more functional.
Ingredion said the combined company would have about $9.9 billion in annual revenue and $1.8 billion in adjusted earnings before interest, taxes, depreciation and amortization after the cost savings the company expects to achieve once the merger is fully integrated.
Ingredion investors are not so sure of that outlook -- for good reasons. Tate & Lyle has also been under pressure. In its fiscal year ended March 2026, the company's net revenue and adjusted Ebitda each fell 3%, reflecting a challenging market environment and muted demand.
Ingredion shares have declined 6% since the deal was first reported last month.
Write to Evie Liu at evie.liu@barrons.com
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(END) Dow Jones Newswires
June 08, 2026 12:13 ET (16:13 GMT)
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