SOUTH AFRICA – Africa’s largest sugar producer Illovo Sugar has announced that Associated British Foods (ABF) plans to take the remaining shareholding in the company; gaining full control of Africa’s biggest sugar producer.

ABF is a diversified British international food, ingredients and retail group with annual sales of £12.8 billion (US$18 billion) last year and 124,000 employees in 48 countries. It has significant businesses in Europe, Southern Africa, the Americas, China and Australia.

The company owns the well-known Kingsmill baked goods brand in the UK.

In the transaction, ABF will take the nearly 49% of shareholding that it doesn’t already own in the sugar miller, tapping into the “growth market for sugar” in Africa, valuing the sugar company at US$759 million.

The companies have entered into a transaction implementation agreement in terms of which ABF (or a wholly-owned subsidiary of ABF) will make an offer to acquire all of the issued shares in Illovo, they note in a statement.

Illovo is Africa’s largest sugar producer with extensive agricultural and manufacturing operations in six African countries. The group harvested 6.3 million tons of sugar cane and produced 1.8 million tons of raw and refined sugar for the year ending 31 March 2015.

It also produces a range of high-value downstream products and generates electricity, fuelled by renewable resources, providing about 90% of the group’s annual energy requirements.

The group is a major supplier of sugar to the consumer and industrial markets in the countries in which it operates and to neighbouring regional African markets, the EU and USA and other World markets.

ABF has operations in the United Kingdom, Spain, southern Africa and China with an annual processing capacity of about five million tonnes of sugar and 600 million litres of ethanol.

ABF acquired its majority shareholding in Illovo in 2006.

Increasing populations and rising incomes in Africa make the continent a growth market for sugar, with the deal executed to “capitalise on this growth”, despite a challenging World sugar trading environment.