Tate & Lyle has agreed to a £2.7bn takeover by its US rival Ingredion, in a deal that could put hundreds of jobs at risk and represents yet another loss for London’s struggling stock market.

The FTSE 250 business, which makes artificial sweeteners such as Splenda, has agreed to a deal that values it at 615p a share, about 60% above its price before news of a possible takeover emerged.

However, the companies said the deal could trigger a “material reduction” in Tate & Lyle’s workforce, representing 3%, or about 475 jobs, of the new group’s headcount.

“Any such workforce reduction would be implemented with the aim of combining the strengths and capabilities of both businesses,” they said in a joint statement.

Tate & Lyle, which is one of the oldest listed companies in the UK, employs just under 5,000 people around the world. About 200 employees are in the UK, most of whom operate from its headquarters in London.

Ingredion, which is headquartered in Chicago, Illinois, employs about 11,000 people worldwide.

The takeover comes at a low point for Tate & Lyle’s share price, which, prior to news of the deal, had lost more than half of its value in just five years.

The company, which was best known for its sugar products, sold its namesake sugar business to American Sugar Refining for £211m in 2010. It then focused on producing artificial sweeteners and speciality food ingredients, buying the US-based CP Kelco, a leader in speciality gums and pectins, for $1.8bn in 2024.

However, it has struggled to impress investors in recent years, reporting weak consumer demand for its products despite the rising use of GLP-1 weight-loss drugs.

Ingredion said its new combined group would generate annual revenue of about $9.9bn (£7.4bn) and make adjusted profits of $1.8bn. Shares in Tate & Lyle were up 14% at 562p in early afternoon trading.

The takeover is yet another loss for London’s stock market, which has suffered a series of high-profile exits in recent years. Several London-listed companies have agreed to take-private deals this year, including the asset manager Schroders, insurer Beazley and laboratory testing company Intertek.

The Tate & Lyle chair, David Hearn, said the company’s “next chapter with Ingredion will create a business with even greater potential, greater scale, and increased investment in innovation in support of customers”.

Jim Zallie, the chair and chief executive of Ingredion, said: “Combining Ingredion and Tate & Lyle’s complementary portfolios creates a global leader in ingredient solutions with the expertise and geographic reach to help shape the future of food.”

Tate & Lyle traces its history back to the late 1800s, when the sugar refiners Henry Tate and Abram Lyle set up rival operations in Liverpool and London, respectively. Tate introduced sugar cubes to the UK in 1875, while Lyle became well-known for producing golden syrup at his refinery on the river Thames.

The two companies merged to form Tate & Lyle in 1921 after the deaths of the founders, and listed on London’s stock exchange in 1938.