Dalgety PLC announces the sale of its Food Ingredients division for £359.5 payable in cash.
The food ingredients and Spillers flour milling operations (DFI) are to be acquired by Kerry Group plc for £335 million.
In addition, Dalgety has sold certain of the division's intellectual property and research activities specific to the development of wheat-based functional ingredients to DuPont for £24.5 million.
DFI manufactures a range of seasonings and coatings across Europe and is one of the UK's leading flour millers.
In the year to June 30, 1997, operating profits of the division were #29.9 million on a turnover of #359 million and year end net assets were £165 million.
Dalgety's group chief executive, Ken Hanna, said: "I am delighted that we have achieved for Dalgety shareholders a price which fully recognises the high quality of business and the excellence of its management and employees.
"This transaction is the first major step in Dalgety's programme to restore shareholder value and we will now be making arrangements to return a major part of the proceeds to shareholders."
On September 15, 1997 Dalgety announced it would dispose of DFI as part of the board's strategy to focus the group, reduce debt and return cash to shareholders. Further details on the return will be announced with the interim results in February.
The sale to Kerry is conditional upon approval by shareholders of both companies and circulars will be posted to shareholders as soon as practicable.
Dalgety has been advised by Lazard Brothers in this transaction.
Note to editors
This announcement for which Dalgety PLC is responsible has been approved by Lazard Brothers & Co, Limited for the purposes of Section 57 of the Financial Services Act 1986. It does not constitute an offeror invation to purchase any securities.