Food-to-go giant Greencore today (May 15) announced that it has agreed the terms of a recommended £1.2 billion takeover deal for rival Bakkavor in a move that will create a food-to-go giant with around 30,500 staff.
Under the cash-and-shares deal, Greencore will pay £2 a share for Bakkavor, which it said is a 33 per cent premium on Bakkavor’s closing share price on March 13.
The tie-up – structured as a reverse takeover – will form a combined food group with annual sales of about £4 billion which supplies many of the UK’s biggest supermarkets and retailers.
Greencore and Bakkavor believe that the Transaction will drive significant benefits for their customers and consumers and make a significant continuing contribution to the UK economy, and are confident in their approach to securing approval of the Transaction by the CMA in a Phase 1 investigation "without undertaking any remedies that are material to the Combined Group".
Greencore is a prepared food specialist, which supplies all major UK supermarkets, as well as the likes of Marks & Spencer.
It has its headquarters in Dublin, with a UK head office and 16 factories across the UK, as well as 17 distribution centres. The group supplies nearly 750 million food-to-go items each year and employs about 13,300 staff.
London-headquartered Bakkavor employs around 17,200 staff across 40 sites in the UK, US and China, with about 20 factories in the UK.
Commenting on this announcement, Dalton Philips, the Chief Executive Officer of Greencore, said, "The combination of Greencore and Bakkavor is an unrivalled opportunity to create a true UK national food champion with an even greater breadth of category range and deeper customer relationships.
"We are bringing together two experienced teams and our complementary portfolios will drive benefits for customers and consumers across the UK.
"The combined group will be able to invest more in innovation and product development ensuring we can provide the consumer with greater food choices at more points in the day, bringing together Greencore's "food for now" expertise with Bakkavor's "food for later" portfolio. We look forward to welcoming Bakkavor's employees and creating an exciting, combined business for all stakeholders.
"Bakkavor is the ideal partner for Greencore and we look forward to delivering on the significant growth potential of the enlarged business."'
Mike Edwards, the Chief Executive Officer of Bakkavor, said, "I am proud to have the honour to lead Bakkavor which is a fantastic business, with great people, producing high quality fresh prepared foods, that has strong strategic relationships with some of the best retailers in the world.
Combining with Greencore would bring together two businesses with the best people in the industry allowing us to take a 'best of both approach' to drive performance on every level. The combined business will create more opportunities for colleagues, allow us to do an even better job for customers, and be even more resilient.
I am confident that the relentless focus that both businesses have on quality, service and innovation, and on striving to be a great place to work, will remain at the heart of the bigger business."
