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December 2, 2008

Singapore Airport SIA unit to buy Temasek’s stake in food company

Singapore Airport Terminal Services (SATS) will buy Temasek's 70 percent stake in Singapore Food Industries (SFI) in a deal valuing the food company around S$478 million ($316.3 million), reported Reuters.

SATS, a unit of Singapore Airlines , said in a statement it will pay Temasek S$334.5 million in cash, or S$0.93 for each SFI share, and make an offer to buy the remaining shares at the same price.

The offer price represents a 4.5 percent premium over SFI's Monday closing price of S$0.89 and compares with the firm's last traded price of S$0.905 on Tuesday before trading was suspended.

Both Singapore Airlines and SFI are majority owned by Temasek.

"The acquisition of SFI will provide immediate scale to SATS' existing food services business and allow it to access wider customer segments," SATS said in a statement.

"SFI's significant UK operations will strengthen SATS' overseas platform to serve its existing customers in a new geographical market," SATS added.

The firm provides ground and inflight services to airlines calling at Singapore's Changi Airport, while SFI's businesses range from selling prepacked food in Britain to managing abattoirs and providing food to Singapore's military.

Both SATS and Singapore Food asked for trading to be suspended in their shares. Merrill Lynch advised SATS on the deal.

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