Greencore, an Ireland-based company, is in the final stages of acquiring Bakkavor, a fellow private-label convenience business, with a new cash and share offer valued at £1.2bn ($1.55bn). The board of Bakkavor has indicated its intention to recommend the deal to its shareholders, stating that the key financial terms represent a value that they would unanimously support.
This acquisition follows two previous takeover bids made by Greencore for Bakkavor, both of which were rejected by the target company. The latest bid values Bakkavor at 200 pence per share, representing a 32.5% premium over the closing share price on 13 March and a 39.8% premium to the company’s volume-weighted closing price in the three months prior.
If approved by Bakkavor’s shareholders, Greencore would own 56% of the combined group, with the target shareholders holding the remaining 44%. The acquisition is expected to create a leading UK convenience food business with a combined revenue of approximately £4bn, subject to clearance from competition regulators.
The proposed deal also includes the appointment of Agust Gudmundsson and Lydur Gudmundsson, currently non-executive directors of Bakkavor, to the board of the combined business. Both companies believe that the acquisition offers compelling strategic, commercial, and financial benefits, including substantial synergies that will enhance growth, innovation, and value creation for shareholders.
Bakkavor, a fresh prepared food supplier, operates in the US and China, generating £2.29bn in revenue in 2024 with 17,200 employees across 41 sites. Greencore, based in Dublin, supplies chilled, frozen, and ambient food from 16 factories in the UK, serving major grocers such as Tesco, Sainsbury’s, and Asda. In the last financial year, Greencore reported revenue of £1.81bn.
As of the latest trading session, Greencore’s shares were down 0.2% at 178.20p, while Bakkavor’s shares were up 7.9% at 191.80p. The potential acquisition of Bakkavor by Greencore represents a significant opportunity for both companies to create value for their stakeholders through synergies, growth, and investment in innovation.
Overall, the proposed acquisition of Bakkavor by Greencore signifies a strategic move to consolidate their positions in the convenience food market and capitalize on their combined strengths to drive growth and value creation for their shareholders. The deal, if finalized, has the potential to reshape the landscape of the UK convenience food industry and unlock new opportunities for both companies in the global market.
