Under the conditional contract, Tate & Lyle will also receive its share of the value of working capital and net cash to be retained in the business on completion of the deal.
TH Milk Food is a Vietnam-based provider of milk, soya milk and milk products, fruit juice and drinking products. It also raises and breeds cows.
The deal is expected to be completed in the first half of the current financial year, subject to certain conditions, including Vietnamese government approvals. It also requires the potential exercise of pre-emption rights by Tate & Lyle's partner in the business, Mitr Phol Saturn Investments Limited.
In July last year, Tate & Lyle announced plans to divest the businesses in Sugars division, comprising EU Sugar Refining, Molasses and Vietnamese sugar, aiming to reduce its net debt.
Tate & Lyle in September last year sold EU Sugar Refining operations to American Sugar Refining, Inc. for 211 million pounds and, in December, sold its molasses business to grain trader W&R Barnett Ltd for 67 million pounds in cash.
Tate & Lyle, which operates two business units, Speciality Food Ingredients and Bulk Ingredients, has stated that its strategy is to grow Speciality Food Ingredients business, supported by cash generated from Bulk Ingredients.
From the April 20, 2011, Prepared Foods' Daily News.