Greencore agrees $1.6bn Bakkavor deal

BY Richard Summerfield

Dublin-based convenience food giant Greencore has agreed to acquire rival Bakkavor in a deal worth $1.6bn. This acquisition will create a giant in the fresh prepared food market, with a combined revenue of £4bn.

Under the terms of the deal, Bakkavor shareholders will be entitled to receive 85 pence in cash and 0.604 Greencore shares for each Bakkavor share held. Bakkavor shareholders will also remain entitled to receive the Bakkavor full year 2024 final dividend of 4.8 pence, declared on 4 March 2025 and payable on 28 May 2025, subject to shareholder approval at Bakkavor's annual general meeting on 22 May 2025.

In total, the offer values each Bakkavor share at 200 pence, a price which represents a premium of 32.5 percent to Bakkavor’s closing share price on 13 March, the day prior to the commencement of the offer period, 39.8 percent to Bakkavor’s volume-weighted average closing share price of 143 pence per share for the three months to 13 March, and 36.6 percent to Bakkavor’s volume-weighted average closing share price of 146 pence per share for the six months to 13 March.

Upon completion of the deal, Greencore shareholders would own approximately 56 percent of the combined group with Bakkavor shareholders owning the remaining 44 percent. The companies said the cash and shares offer, on which they had reached “agreement in principle”, would proceed subject to shareholder and regulatory approval. Greencore said Bakkavor had indicated its board would be “minded unanimously to recommend” the offer to its shareholders.

According to the statement announcing the deal, the transaction includes a contingent value right for Bakkavor shareholders linked to a potential sale of Bakkavor’s US business. Additional value would payable if the sale occurs before 30 June 2026 or completes within 12 months of the offer.

Furthermore, upon completion, Agust Gudmundsson and Lydur Gudmundsson, currently non-executive directors of Bakkavor, would join the board of the combined group as non-executive directors.

With this acquisition, Greencore aims to strengthen its leadership in the fresh prepared food industry, expand its retail partnerships and grow its global footprint. Bakkavor is one of the UK’s largest makers of fresh food, such as ready meals, salads and dips. The company is a key supplier in the freshly prepared food market, providing M&S gastropub ready meals, Tesco’s Pinch brand and Sainsbury’s healthy snacking range. The company operates across 41 sites, employs more than 17,000 people and generates £2.3bn in revenue, with 85 percent coming from the UK. Bakkavor is also expanding its presence in the US and China.

News: UK food group Greencore to buy rival Bakkavor in $1.6 billion deal

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