Associated British Foods unit British Sugar has agreed to acquire Ebro Puleva SA’s Spanish sugar business Azucarera Ebro SL for €385 million (£346 million). 

Associated British Foods unit British Sugar has agreed to acquire Ebro Puleva SA’s Spanish sugar business Azucarera Ebro SL for €385 million (£346 million).

The deal will be funded from the international food, ingredients and retail group’s existing cash resources with a deferred component of €20 million to be paid over the next two years.

 Azucarera Ebro is the largest sugar producer in Iberia, supplying some 50 per cent of the 1.6 million tonnes of sugar consumed.

The deal was completed to bolster British Sugar’s presence in the EU as the target has a leading position in the Iberian sugar market, with a full range of products, long-standing customer relationships and strong retail brands.

George Weston, Associated British Foods CEO, said: “The acquisition of Azucarera Ebro is an exciting development for British Sugar. The business enjoys a leading position in Iberia supported by modern beet factories and a new cane refinery that will benefit from our partnership with Illovo Sugar.”

The transaction is subject to regulatory approval and is likely to close early 2009.