Greencore Agrees £1.2 Billion Takeover Of Bakkavor

Convenience food manufacturer Greencore has confirmed a recommended offer to acquire UK fresh food provider Bakkavor Group in a deal valued at £1.2 billion ($1.59 billion), marking a major consolidation in the UK chilled food sector.

Image: Greencore

In a statement released on Thursday (15 May), Greencore said the deal comprises a cash and share offer, valuing each Bakkavor share at 200 pence. The offer includes 85 pence in cash and 0.604 new Greencore shares per Bakkavor share, with the potential for additional value should Bakkavor’s U.S. business be sold.

The agreement builds upon a preliminary deal in principle announced in April, when both companies confirmed alignment on key financial terms.

Bakkavor, known for its wide range of fresh food products including soups, dips, salads, desserts, pizzas and breads, has been undergoing strategic changes across its UK, China and US operations to combat rising costs, weaker consumer demand and falling volumes.

The group supplies a number of major UK retailers including Tesco, M&S, and Waitrose, while Greencore serves all major UK supermarkets, cementing its reputation as a dominant force in the convenience food space.

As part of the agreement, Greencore said it has already secured binding commitments from Bakkavor shareholders representing approximately 69.4% of issued shares. This paves the way for a smooth transaction.

Upon completion of the deal, Greencore shareholders are expected to hold around 56% of the combined group, while Bakkavor shareholders will own roughly 44%.

The acquisition is expected to unlock operational efficiencies and further strengthen the merged group’s ability to respond to ongoing market challenges and changing consumer behaviours.

Source: Reuters