(Reuters) – French sugar maker Tereos has agreed to buy sugar distributor Napier Brown Sugar from Britain’s Real Good Food for 34 million pounds ($52.27 million), in a bid to put itself in a better position for the deregulation of the European market.
The protected EU sugar market will see a dismantling of production quotas in October 2017, which will enable beet sugar producers like Tereos to compete freely on world markets, potentially exporting refined sugar around the world.
“The changes taking place within the European sugar market mean that the future of this business is best served by it becoming part of an international production group,” said Pieter Totté, executive chairman of Real Good Food.
Tereos, the world’s fifth largest sugar maker, said the deal would also strengthen its position in the UK, a major market for French producers, by broadening its product range and improving its distribution network.
Founded 90 years ago, Napier Brown is Europe’s largest independent sugar distributor and distributes around 300,000 tonnes of sugar per year.
Tereos said the deal, subject to Real Good Food shareholders’ approval, was expected to complete by the end of May 2015.
($1 = 0.6505 pounds)
By David Brough and Sybille de La Hamaide (Editing by Louise Heavens)