* Cristal Union agrees purchase of 51 pct of Vermandoise
* Minority buyout to follow purchase of family majority
* Deal also includes Vermandoise unit SSPLV
* Cristal says preparing for post-2015 EU sugar
* New group to have 1.2 bln euro sales, No. 2 in French
(Rewrites first paragraph, adds quotes from news conference)
By Dominique Vidalon
PARIS, Oct 4 Sugar cooperative Cristal Union is
to acquire French peer Societe Vermandoise in a deal
worth nearly 1 billion euros ($1.3 billion), as it gears up for
an expected liberalisation of the European sugar market.
The takeover, which would create the No. 2 two sugar group
in France after Tereos and the No. 5 in the European Union,
would help Cristal Union compete in European and world markets
once the EU dismantles its sugar quota system later this year,
company officials said on Tuesday.
"In a more liberalised system the consolidation of the two
groups will give us greater access to international markets,
Cristal Managing Director Alain Commissaire told reporters.
The EU's executive is due this month to publish proposals
for a reform of its sugar regime, which regulates production
through quotas and minimum prices and which expires in 2015.
A liberalisation of the EU regime could also open up exports
and imports, which are tied to quotas and are the subject of
international trade negotiations.
Cristal Union's acquisition of Vermandoise -- the second
major shakeup in the European sugar sector after Tate & Lyle
Plc's disposal of its European sugar operations to
American Sugar Refining last year -- would build a group with
pro-forma sales of close to 1.2 billion euros and annual sugar
production of around 1.45 million tonnes.
The cooperative has signed an exclusive deal to buy a 51
percent stake owned by the Delloye family in Vermandoise, which
has a market capitalisation of 262 million euros.
This will also cover Vermandoise's majority holding in
another sugar company, Societe Sucriere de Pithiviers Le Viel
(SSPLV) , whose market value is 472 million euros,
according to Reuters data.
The overall valuation of the transaction, estimated at 951
million euros, represents the cost of buying all shares in
Vermandoise and SSPLV, Commissaire said.
After acquiring the majority shareholding of the Delloye
family and if approved by competition authorities, Cristal Union
is to launch a buyout offer for the rest of Vermandoise shares
at 3,487.30 euros per share and for the rest of SSPLV shares at
1,692.76 euros per share.
Following the closure of the buyout offer, expected in late
December or January, Vermandoise will be delisted.
The valuation reflected recent deals in the European sugar
sector and strong growth prospects, officials said.
The main shareholder apart from the Delloye family affected
by the transaction is U.S. investment fund First Eagle, with a
20 percent stake in SSPLV, they said.
The share offer prices would represent a premium of 98.7
percent to SVS's closing price on Sept. 30 and a premium of
125.7 percent over SSPLV's closing price on Sept 30.
The deal is fully funded by Credit Agricole Nord Est and
Credit Agricole Corporate and Investment Bank, part of Credit
Agricole SA .
"The financing was done without any difficulty," Commissaire
said, citing Cristal Union's secure financial position and
support for the project from Credit Agricole as the traditional
lender to France's farm sector.
Cristal Union posted gross operating profit of 144 million
euros in 2010-11, compared with 81 million for Vermandoise,
officials said, declining to give further details about Cristal
Cristal Union, known for the "Daddy" and "Erstein" sugar
brands, is a cooperative grouping 5,350 farmers that produces
900,00 tonnes of sugar and 4.5 million hectolitres of alcohol
per year from 11 sites and employs 1,500 people in France.
Groupe Vermandoise produces 550,000 tonnes of sugar and
600,000 hectolitres of alcohol each year from four sites. It
employs 568 people and is supplied by 3,800 sugar beet growers
who will have the option of becoming cooperative shareholders in
Cristal Union following the takeover.
The combined group would maintain existing production sites
and jobs, officials said.
While awaiting the reform of the EU's sugar market, Cristal
Union was already expanding its overseas presence, including
through a sugar refinery in Algeria due to launch in mid-2012.
Main French rival Tereos, also a cooperative, has developed
a large business in Brazil and these activities form part of its
listed subsidiary Tereos Internacional .
Already a producer of ethanol fuel, Cristal is in talks with
two U.S. molecule research companies to produce a new form of
jet fuel, with announcements expected in the year ahead,
He said Cristal is also preparing to distribute in France
sweetener products derived from the stevia plant in a supply
deal with global agribusiness group Cargill . France
approved the launch of the sweetener last year ahead of pending
(Editing by Mike Nesbit and David Holmes)