Greencore seeks to takeover Bakkavor, facing possible CMA opposition, but likely to proceed.
From Yahoo Finance.: 2025-05-21 09:19:00
Greencore’s potential takeover of Bakkavor could face opposition from the UK’s competition regulator, the CMA. However, with majority shareholder approval, the deal is likely to proceed, pending a vote in July. Job losses may be a concern, as up to 1,525 staff could be affected by office and factory consolidation.
Analysts believe there is little portfolio duplication between Greencore and Bakkavor, potentially easing CMA concerns. However, ready meals and other crossover segments could be contentious. The deal would bring new products like pizza and breads to Greencore’s portfolio, enhancing its offerings to consumers and retailers.
Greencore and Bakkavor are confident in securing CMA approval without significant remedies. However, Greencore may walk away if conditions become too burdensome. The CMA will conduct a Phase 1 investigation to assess competition impact, with a potential Phase 2 probe if necessary. Industry sources suggest approval with possible conditions.
A Greencore-Bakkavor merger could lead to increased purchasing power and efficiency, benefiting both companies. Dalton Philips, Greencore’s CEO, aims to restore profitability to pre-Covid levels post-merger. The combined entity would create a stronger UK food champion. The deal promises benefits for customers and consumers across the country. Greencore and Bakkavor are merging to offer consumers more food choices throughout the day. Analysts don’t foresee competition issues due to operating in a fragmented market. The combined companies represent less than 4% of the UK convenience food market, valued at £54bn. The deal aims for £80m in cost synergies by 2026.
The merger is expected to be completed in 2026 pending regulatory approval. Both companies are confident in securing approval without major remedies. The CMA may require the sale of some factories. Greencore has 16 sites in the UK, while Bakkavor operates 40 plants globally.
The combined company plans to invest in innovation, automation, and sustainability. Factory consolidation is expected to optimize distribution and bring cost synergies. The merger will enhance supply chain efficiency and quality. Greencore supplies major UK supermarkets and other retailers.
The merger will lead to increased investment in automation. The companies aim to drive value for shareholders, customers, and consumers. Scale benefits, quality improvements, and innovation are expected. Competitive pricing may improve over time. Greencore shareholders would own 56% post-merger.
Greencore’s CEO will lead the combined business, while Bakkavor executives are set to exit. Bakkavor’s CEO and CFO will stay for a transitional period. Greencore’s board will oversee the combined group, with Bakkavor founders as non-executive directors. The deal aims to create a stronger, more competitive food group. All Bakkavor directors are set to resign, as confirmed by a recent filing. Greencore’s bid has already been accepted by most Bakkavor shareholders, prompting speculation on the CMA’s response to government pressure for more flexibility in decision-making on deals.
RBC sees significant benefits in the Greencore-Bakkavor merger, citing growth in the convenience food sector, increased demand for product innovation, improved quality, and a balanced value proposition. Stakeholders stand to gain from the combination as the sector evolves.
The takeover bid by Greencore for Bakkavor puts the CMA to the test, as the competition authority weighs the implications of the deal. The convenience food sector’s expansion, driven by consumer demand for innovation and quality, adds complexity to the decision-making process.
Read more at Yahoo Finance.: Greencore tests CMA mettle in takeover bid for Bakkavor