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Associated British Foods PLC (LSE:ABF) will split its business into two separate listed companies, confirming plans to demerge its Primark retail arm from its food operations.
Following a strategic review launched in November, the FTSE 100 group said shareholders will receive stakes in both separately listed companies. Primark and the remaining food business, to be known as FoodCo, are expected to join London’s blue-chip index.
The demerger is targeted for completion before the end of 2027, subject to approvals. It will be carried out via a dividend distribution to shareholders.
The results of the review are backed by the group’s largest shareholder, the founding Weston family’s investment vehicle, Wittington Investments, which will retain majority ownership in both entities.
Chair Michael McLintock said the demerger would “maximise long-term returns for shareholders”.
For the food business, chief executive George Weston said the move would allow “greater understanding of the breadth and strength of our differentiated portfolio and its long-term growth opportunities”.
Regarding Primark, he said the separation enables “the creation of appropriate governance to maximise the future potential offered by Primark’s powerful brand, strong customer proposition and opportunities in existing and new markets”.
Primark operates 486 stores across 19 markets and generates around £9.5 billion in annual revenue.
The food division, which owns brands including Kingsmill, Jordans, Mazola, and Ovaltine, operates across 521 countries and generates roughly £9.8 billion in sales.
Separation costs are expected to be about £75 million, with ongoing dis-synergies below £45 million.
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