The Competition and Markets Authority (CMA) has launched an investigation into Greencore’s proposed £1.2bn acquisition of fellow food-to-go giant Bakkavor.
The competition watchdog said it was considering whether it may be the case that the transaction, if carried into effect, may result in “a substantial lessening of competition” within any UK market for goods and services.
As a preliminary part of phase 1 of its merger inquiry, and to assist with its information gathering process prior to assessment, the CMA is inviting comments from any interested parties. Written representations are to be made via email to the CMA during a two-week period ending on 22 July, after which the competition watchdog will launch its formal investigation.
Following a lengthy process that included two offer rejections, Bakkavor and Greencore were able to finalise all conditions in May on the deal set to create a UK food-to-go manufacturing business with a combined revenue of £4bn and a workforce of around 30,500 staff. The latest acquisition terms saw Bakkavor shareholder entitled to 85p per share in cash plus 0.604 in new Greencore shares, which places a value of £2 on each Bakkavor share.
Greencore shareholders are to come out of the merger with around 56% of the shares in the newly combined company, with Bakkavor shareholders owning 44%.
Both companies expressed confidence in a positive outcome from the merger inquiry and were expecting the transaction to become effective in early 2026.
“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,” read a joint statement.
General meetings of Greencore and Bakkavor shareholders on 4 and 7 July, respectively, saw requisite majorities vote in favour of the transaction.
Greencore CEO Dalton Philip called the acquisition of Bakkavor “an unrivalled opportunity to create a true UK national food champion with an even greater breadth of category range and deeper customer relationships”. He claimed the bringing together of two experienced teams with complementary portfolios would drive benefits for customers and consumers, and would grant the ability to invest more in innovation and product development.
Greencore’s ‘food for now’ range is primarily sandwiches, wraps, salads and ready meals, while Bakkavor’s ‘food for later’ portfolio includes several products it doesn’t make such as pizzas, breads, desserts, and chilled dips.
No comments yet