Food-to-go group Greencore agrees £1.2bn takeover of rival Bakkavor
The groups warned over job cuts and factory closures as part of aims to save at least £80 million in costs a year after the deal.
Supermarket sandwich maker Greencore has agreed a £1.2 billion takeover deal for rival Bakkavor in a move that will create a food-to-go giant with around 30,500 staff.
Under the cash-and-shares deal, Greencore will pay £2 a share for Bakkavor, which it said is a 33% premium on Bakkavor’s closing share price on March 13.
The tie-up – structured as a reverse takeover – will form a combined food group with annual sales of about £4 billion which supplies many of the UK’s biggest supermarkets and retailers.
But the groups warned over job cuts and factory closures as part of aims to save at least £80 million in costs a year after the deal.
They plan to strip out duplicate headquarters and back office operations, such as administration and support, while they said around 5% of the cost savings would come from reducing combined manufacturing sites, impacting some factory workers.
They estimated that up to around 5% of the total combined workforce could be cut.
However, the firms said they do not expect “material” redundancies as many of the role cuts will come from not replacing staff as they leave, not filling outstanding vacancies and pausing some hiring plans.
Trade union Unite said it had “serious concerns” over the Greencore and Bakkavor tie-up and is calling for an urgent meeting with the companies’ bosses.
Unite national officer for food, Bev Clarkson, said: “Less competition in the marketplace is likely to lead to long-term wage stagnation and potential redundancies.
“It is also bad news for consumers as, at a time when prices are already rising, fewer competitors in the market will likely lead to faster price rises.”
Eamon O’Hearn, national officer, at the GMB union, added: “The likelihood of site closures and drop in headcount confirms our worst fears – that hard-working production staff will be facing job losses.”
Greencore shareholders will own around 56% of the combined group and Bakkavor the remaining 44% stake following the takeover, which is expected to complete in early 2026 if approved by regulators and shareholders.
“The boards of Greencore and Bakkavor believe that a combination will drive significant benefits for customers and colleagues of both companies and will make a significant continuing contribution to the UK economy,” according to the firms.
Greencore is a prepared food specialist, which supplies all major UK supermarkets, as well as the likes of Marks & Spencer.
It has its headquarters in Dublin, with a UK head office in Worksop and 16 factories across the UK, as well as 17 distribution centres.
The group supplies nearly 750 million food-to-go items each year and employs about 13,300 staff.
London-headquartered Bakkavor employs around 17,200 staff across 40 sites in the UK, US and China, with about 20 factories in the UK.
It makes around 3,100 different freshly prepared food products, including meals, salads, desserts, dips, sauces, sandwiches, and pizza and bread products.
Dalton Philips, chief executive of Greencore, said: “The combined group will be able to invest more in innovation and product development ensuring we can provide the consumer with greater food choices at more points in the day, bringing together Greencore’s ‘food for now’ expertise with Bakkavor’s ‘food for later’ portfolio.”
The deal comes after Bakkavor had rejected two previous approaches from Greencore.
The firms also said that as part of the deal, there would be a payment to Bakkavor shareholders should it sell off its US business within a year of any takeover by Greencore.
Bakkavor has also agreed recently to offload its China business, which is set to complete in the second half of the year.
Simon Burke, the chairman of Bakkavor, said: “There has always been a clear strategic, commercial and financial rationale for a combination with Greencore.
“Having considered a combination previously, we believe that this transaction now proposes terms that we consider are very attractive to Bakkavor’s shareholders.”
