Australian sugar consolidation on the cards
Maryborough Sugar Factory, the only publicly listed pure sugar company in Australia, has announced a $90.4 million bid for Tully Sugar.
The news comes just over three months since merger talks, which begun last year, ceased between the two parties. At the time both parties said they were keen to pursue industry consolidation in North Queensland but were simply unable to come to an appropriate agreement.
If the deal receives shareholder approval, Tully shareholders would hold around 46 per cent of the merged group.
A deal will create a far more substantial competitor in the sugar industry, with the merged entity producing around 500,000 tonnes of raw sugar annually. Cane crushing capacity will be around 5 million tonnes per annum.
“We believe that the merger Offer proposal Maryborough has put forward is an excellent opportunity for Tully Shareholders to have investment liquidity at a fair value, and to be part of an established ASX-listed sugar group,” Maryborough’s Chairman, Mr James Jackson, said. “Importantly, if the Maryborough proposal succeeds Tully Shareholders will become investors in a widely-held sugar company of significant value, with a clear mandate of continued growth in Far North Queensland, whilst pursuing improved returns to growers and investors alike, in the creation of a long-term sustainable sugar industry.”