Ebro Puleva: to sell sugar unit to British Sugar

Madrid / ES. (ep) The Board of Directors of Ebro Puleva, sole shareholder of Azucarera Ebro, and Associated British Foods (ABF), sole shareholder of British Sugar, have reached an agreement in principle for the sale of Azucarera Ebro. The agreement is subject to execution of the necessary legal contracts which is expected to occur within the coming weeks. Completion will be subject to the approval by the anti-trust authorities and will foreseeable be happening within the first four months of 2009.

Total consideration of the transaction is 526 million EUR with the following breakdown:

• ABF will purchase the sugar business for 385 million EUR, debt free.
• Ebro Puleva will receive 141 million EUR from third parties, corresponding to other compensations, mainly the restructuring funds established under the CMO sugar reform.

Under this agreement in principle Ebro Puleva will incorporate into its real estate portfolio, more than 200 hectares of land classified for various uses, with an estimated value of 42 million EUR.

The transaction, which concludes a process began by the Board of Directors in May 2008 and ratified by the General Shareholders Meeting one month later, is very positive for the future of the beet and sugar sector in Spain, since Azucarera Ebro will be joining the second largest sugar producer in the world. British Sugar, with a global production of four million tonnes a year, is present in nine countries across Europe, Southern Africa and China. Moreover, back in April 2008 British Sugar and Azucarera Ebro entered into a contract for the future supply of raw sugar to the new refinery in Guadalete through Illovo Sugar Limited, part of the British Sugar Group.

For the Ebro Puleva Group, this transaction will represent a leap forward in its current strategic plan, geared essentially towards focusing its efforts and resources on its key businesses (rice, pasta, dairy and functional foods), shedding non-strategic businesses, reducing its debt and optimising overheads. Banco Santander has acted as financial advisor to the seller.

About Ebro Puleva – ABF – British Sugar

Ebro Puleva is the leading Group in the Spanish food sector in terms of turnover, profit, market capitalisation and international presence. Ebro Puleva is world leader in the rice sector, the second group in the international pasta sector, the leading sugar group in Spain and number 1 on the Spanish dairy product market. It has leading brands in each of these sectors.

Associated British Foods is a diversified international food, ingredients and retail group with sales of 8,2 billion GBP and 96’000 employees in 44 countries. Its aim is to achieve strong, sustainable leadership positions in markets that offer potential for profitable growth. The group looks to achieve this through a combination of growth of existing businesses, acquisition of complementary new businesses and achievement of high levels of operating efficiency. The group has established a track record of successful value-adding transactions.

British Sugar is the second largest sugar producer in the world producing four million tonnes of sugar annually and has sugar operations in the United Kingdom, Poland, China and in a number of countries in southern Africa. British Sugar´s revenue for the year ending September 2008 was some 1,3 billion GBP.