Greencore Proposes £1.2 Billion Takeover of Bakkavor to Create Food-to-Go Leader
The deal, which values Bakkavor at 200p per share, aims to unite two major UK convenience food manufacturers.
Greencore, a leading supermarket sandwich maker, has reached an agreement in principle for a potential takeover of rival Bakkavor valued at approximately £1.2 billion.
The proposal includes a cash-and-shares offer priced at 200 pence per share, representing a 33% premium based on Bakkavor’s closing share price from March 13.
If the deal proceeds, it is projected to establish a combined food group with annual sales nearing £4 billion.
Greencore is headquartered in Dublin and operates a UK office in Worksop, along with 14 factories throughout the UK. The company specializes in prepared food and provides nearly 750 million food-to-go items annually, employing around 13,300 staff.
Bakkavor, headquartered in London, employs about 18,000 personnel across 42 factories located in the UK, US, and China.
Established in 1986, Bakkavor produces approximately 3,500 different freshly prepared food products, ranging from meals and salads to desserts and ready-to-eat items.
Under the terms outlined in the potential agreement, Greencore shareholders would retain roughly 56% of the merged entity while Bakkavor shareholders would hold the remaining 44%.
Bakkavor’s board has stated that it would likely support the deal should Greencore officially submits an offer, following previous rejections of two earlier proposals from Greencore.
Additionally, the companies noted that if Bakkavor decides to divest its US operations within a year after any takeover, there would be a specific payment for Bakkavor shareholders.
They also stated that they are currently evaluating potential “substantial synergies” from the merger, which will be disclosed at a later date.
The announcement comes shortly after Greencore increased its profit forecasts, citing robust revenue and volume growth in its second quarter ending March 28, driven by a resurgence in convenience food sales as workers return to offices post-pandemic.
The revival of commuting has positively impacted sales of ready meals, as less available leisure time affects food preparation habits.
Bakkavor has undergone significant expansions over the years, including a notable acquisition of the fresh food supplier Geest in 2005 for £485 million, which significantly increased its market presence.
The proposed merger stands to deliver a diversified product range and enhanced operational capabilities applicable to the UK's convenience food sector, thereby contributing positively to the overall economy.
The proposal includes a cash-and-shares offer priced at 200 pence per share, representing a 33% premium based on Bakkavor’s closing share price from March 13.
If the deal proceeds, it is projected to establish a combined food group with annual sales nearing £4 billion.
Greencore is headquartered in Dublin and operates a UK office in Worksop, along with 14 factories throughout the UK. The company specializes in prepared food and provides nearly 750 million food-to-go items annually, employing around 13,300 staff.
Bakkavor, headquartered in London, employs about 18,000 personnel across 42 factories located in the UK, US, and China.
Established in 1986, Bakkavor produces approximately 3,500 different freshly prepared food products, ranging from meals and salads to desserts and ready-to-eat items.
Under the terms outlined in the potential agreement, Greencore shareholders would retain roughly 56% of the merged entity while Bakkavor shareholders would hold the remaining 44%.
Bakkavor’s board has stated that it would likely support the deal should Greencore officially submits an offer, following previous rejections of two earlier proposals from Greencore.
Additionally, the companies noted that if Bakkavor decides to divest its US operations within a year after any takeover, there would be a specific payment for Bakkavor shareholders.
They also stated that they are currently evaluating potential “substantial synergies” from the merger, which will be disclosed at a later date.
The announcement comes shortly after Greencore increased its profit forecasts, citing robust revenue and volume growth in its second quarter ending March 28, driven by a resurgence in convenience food sales as workers return to offices post-pandemic.
The revival of commuting has positively impacted sales of ready meals, as less available leisure time affects food preparation habits.
Bakkavor has undergone significant expansions over the years, including a notable acquisition of the fresh food supplier Geest in 2005 for £485 million, which significantly increased its market presence.
The proposed merger stands to deliver a diversified product range and enhanced operational capabilities applicable to the UK's convenience food sector, thereby contributing positively to the overall economy.
