* Tie-up set for Dec. 31 subject to approval
* Amalgamated company to retain SAV name
* Merging as EU guaranteed prices cut
ANTANANARIVO, Sept 17 (Reuters) - Two leading Mauritian sugar producers listed on the nation’s benchmark SEMDEX index .MDEX have confirmed plans to merge by the end of the year.
The sugar sector is a centuries-old pillar of the Indian Ocean island’s $9 billion-a-year economy.
It is investing hundreds of millions of dollars in producing refined sugar as the European Union cuts its guaranteed price offered for African, Caribbean and Pacific (ACP) bloc exports.
In notices to shareholders late on Wednesday, Mon Desert-Alma Limited MDAO.MZ (MDA) and the Savannah Sugar Estates Company SVAO.MZ (SAV) unveiled the merger but said it remained subject to approval from regulators and shareholders.
“The board is pleased to announce that it has approved the proposed amalgamation of MDA with the Savannah Sugar Estates Company Limited,” MDA’s statement said.
Following the planned merger, SAV will remain as the amalgamated company, both statements said. The two companies said the merger would be postponed until Dec. 31, 2009, in order to meet legal requirements.
Sugar exports account for about three percent of Mauritius’ GDP, according to the Mauritius Chamber of Agriculture.
The end of the EU’s sugar protocol will see the price of raw sugar fall a cumulative 36 percent to 336 euros ($475) per tonne compared with an original guaranteed price of 523.70 euros.
Two other sugar producers, Harel Freres Limited HARF.MZ and the Mount Sugar Estates Company Limited MOUN.MZ, are also considering a merger in January 2010. (Editing by Daniel Wallis; Editing by David Cowell)