Acquisition

Associated British Foods PLC
19 May 2006


  Associated British Foods plc announces a recommended offer to acquire 51% of
                      Illovo, Africa's largest sugar producer


For immediate release

19 May 2006


Associated British Foods plc ('ABF'), the international food, ingredients and
retail group, has today announced a recommended offer to acquire 51% of the
fully diluted ordinary share capital of Illovo Sugar Limited ('Illovo') for a
cash consideration of £317m (R3.8bn) to be paid from existing resources and
banking facilities on completion ('the recommended offer').  This offer is
subject to regulatory approvals, Illovo shareholder approval and Court sanction
of the scheme of arrangement.


Illovo is listed on the JSE Limited ('JSE').  In the year ended 31 March 2006
its revenue was £458m (R5.5bn), it generated a profit before taxation and
material items of £54m (R651m) and headline earnings of £29m (R352m).  At 31
March 2006 it had gross assets of £333m (R4.0bn).


The company is the largest cane sugar producer in Africa and one of the world's
lowest cost producers.  It is the leading producer in South Africa, Malawi,
Zambia and Swaziland and has a strong and growing presence in Tanzania and
Mozambique.  It produced 1.9 million tonnes of sugar in 2005/6 and has
identified development programmes to expand this capacity substantially.


British Sugar is a substantial and core business within ABF.  It has sugar
operations in the UK, Poland and China, processing around 2 million tonnes of
sugar annually, and is the lowest cost beet sugar processor in the EU.


ABF will support Illovo's stated plans for capacity expansion and development in
its African markets.  It is expected that Illovo will benefit from the
application of British Sugar's proven expertise in improvement in operational
efficiencies, co-product development, marketing and product innovation.  In
turn, British Sugar's Chinese cane sugar operations will benefit from Illovo's
agricultural expertise.


The changes to the EU sugar regime will provide free access for exports to the
EU from Least Developed Countries ('LDCs') from 2009.  The LDC classification
includes Malawi, Zambia, Tanzania and Mozambique.  British Sugar will provide an
efficient route to market for these exports from Illovo.


In the first full year after acquisition the operating profit return is expected
to meet the ABF cost of capital, and will be earnings enhancing.


George Weston, Chief Executive of ABF, said,


'The combination of British Sugar and Illovo will create a powerful partnership
in Africa and Europe.  Illovo has strong positions in its African markets, an
excellent management team and the opportunity to benefit from free access for
exports from its LDC operations to the EU from 2009.  There is considerable
scope to develop Illovo through British Sugar's market and technical expertise.'


Don MacLeod, Managing Director of Illovo, said,


'Illovo and British Sugar are long term players in the sugar industry with
significant complementary strengths, and are recognised for their efficiency as
sugar producers.  Illovo will benefit from British Sugar's knowledge of the
European market particularly once its operations in LDC countries receive
unrestricted access into the EU from 2009.  It is anticipated that there is good
scope for technology transfer between the two parties.'


Deal Structure


The recommended offer carries the unanimous recommendation of the Illovo Board
and the full support of the Illovo management team.  ABF has received
conditional undertakings to support this offer from the principal shareholders,
either directly or through recommendations to their clients, accounting for 64%
of Illovo's ordinary shares in aggregate.  The directors of Illovo have said
that they intend to vote their own shares in favour of the offer.  The
conditions of the recommended offer include obtaining regulatory approvals,
Illovo shareholder approval and Court sanction of the scheme of arrangement.


The principal features are:


•      Offer for 51% of the fully diluted ordinary share capital;

•      Illovo shareholders will receive a consideration of R21 per share in
       cash;

•      Illovo will remain listed on the JSE and will retain its South African
       identity;

•      The acquisition of shares is to be effected by way of a scheme of
       arrangement governed under South African law;

•      ABF will have appropriate Illovo Board representation;

•      Existing management team will continue and Don MacLeod will be asked to
       join the Executive Committee of British Sugar; and

•      The transaction is expected to be earnings enhancing for ABF from the
       outset.


For further information please contact:


Associated British Foods:

Until 1200 only

George Weston, Chief Executive     Geoff Lancaster, Head of External Affairs
John Bason, Finance Director       Mobile: [phone]
Tel: [phone]


Jonathan Clare/Chris Barrie/Sara Batchelor, Citigate Dewe Rogerson
Tel: [phone]

After 1500

John Bason, Finance Director
Tel: [phone]


A presentation for analysts will take place at 0900 hrs (London time) at the
offices of ABN Amro, 250 Bishopsgate, London EC2M 4AA.


A webcast of the conference call will be available on the company website,
www.abf.co.uk.  The presentation will also be audible on [phone] with a
telephone replay facility available for 7 days following the event on +44 20
7031 4064, PIN number 706171.


Notes to Editors:

Associated British Foods plc

Associated British Foods plc ('ABF') is a diversified international food,
ingredients and retail group with global sales of £5.6bn and over 42,000
employees.  It is listed on the London Stock Exchange with a market
capitalisation of £6bn.  It operates in 41 countries with significant businesses
outside Europe in Australia, China and the US.  It has had a successful history
of international partnerships with minority shareholders.  The group operates in
four business categories: Primary Food & Agriculture, Grocery, Ingredients and
Retail.


ABF aims to achieve sustainable leadership positions in markets and businesses
that offer potential for profitable growth.  It strives to achieve this through
a combination of organic growth and, while maintaining a strict financial
discipline, the acquisition of complementary businesses.  The group has a strong
track record of successfully completing value adding acquisitions such as AB
Mauri, its leading international yeast and bakery ingredients business, Mazola,
Ovaltine and Littlewoods stores.


British Sugar

British Sugar is a wholly owned, substantial and core business within ABF.  It
has sugar operations in the UK, Poland and China which process around 2 million
tonnes of sugar annually.


British Sugar is the lowest cost beet sugar processor in the EU and processed
1.34 million tonnes of sugar during the last UK campaign.  It has market
leadership in the UK and established sales positions elsewhere in the EU and its
two leading retail brands in the UK are Silver Spoon and Billington's. It has a
proven ability to create value through improvement in agricultural yields,
operational efficiencies, co-product development, marketing and product
innovation.  It has world class production facilities and technical expertise,
and Wissington in Norfolk is the largest and most efficient beet sugar factory
in the world.  The UK's first bioethanol plant is currently being constructed at
Wissington.


British Sugar entered into its first joint venture in the Polish market in 1989.
It has since developed its presence considerably.  200,000 tonnes of sugar are
processed annually and its two facilities include Glinojeck, Poland's highest
capacity and lowest cost beet factory.  It has used its expertise to build
Poland's premier retail sugar brand, become a leader in animal feeds
co-products, improve agricultural yields and reduce processing cost through
investment and process innovation.


British Sugar entered the Chinese market in 1995 through a joint venture and now
has four cane sugar factories with a processing capacity of 550,000 tonnes of
sugar annually.  It has dramatically improved agricultural productivity, factory
extraction and sugar yields and has developed a direct industrial customer base
with its supply of European standard sugar.


Illovo Sugar Limited

Illovo is a leading, global, low cost sugar producer and a manufacturer of high
value downstream products.  It is Africa's biggest sugar producer and has
extensive agricultural and manufacturing operations in six African countries.


Excellent climatic and soil conditions found in the group's African countries of
operation, accompanied by irrigation from secure water sources, are ideal for
the cultivation of high quality sugar cane.  Annual cane production of 5.5
million tonnes is produced on agricultural estates in South Africa, Malawi,
Zambia, Swaziland, Tanzania and Mozambique.  Sugar production in 2005/6 was 1.9
million tonnes comprising 920,000 tonnes in South Africa, 275,000 tonnes in
Malawi, 250,000 tonnes in Zambia, 235,000 tonnes in Swaziland, 140,000 tonnes in
Tanzania and 75,000 tonnes in Mozambique.


Illovo is a major supplier of sugar to African consumer and industrial markets.
It is the leading producer in South Africa, Malawi, Zambia and Swaziland and has
a strong and growing presence in Tanzania and Mozambique.  It has ACP access to
the EU, principally through Swaziland, while the African operations outside
South Africa also have access to the South African Customs Union market under
the terms of the Southern African Development Community (SADC) Sugar Protocol on
Trade.  Sugar in consumer packs is supplied into other regional markets within
Africa.  The South African, Swaziland and Mozambique businesses export sugar
into the world market.


In recognition of its interdependence with the communities in which it operates,
Illovo co-ordinates a wide range of social investment-related programmes
focusing on basic needs such as the provision of water and sanitation, access to
health care, education delivery and involvement in community outreach
programmes.  Illovo also provides considerable extension, training and other
support to Black farmers in order to promote sustainable agriculture and
economic development activities.


                     This information is provided by RNS
            The company news service from the London Stock Exchange