If approved, the deal would create a £4 billion convenience food supplier
Convenience food giant Greencore has reached an agreement in principle to acquire fresh prepared food and salad firm Bakkavor.
In an announcment to the London Stock Exchange on 2 April, the boards of the two groups said they have reached agreement in principle on the key financial terms of a possible cash and share offer by Greencore for whole Bakkavor business.
If it goes ahead, the move – which will need to overcome any regulatory clearances – will create a leading UK convenience food business with a combined revenue of around £4 billion.
Bakkavor’s board said the terms of the deal were sufficient for it to unanimously recommend shareholders back the takeover. Similarly, Greencore’s board said it ”would be minded to unanimously recommend the key financial terms to Greencore’s shareholders subject to agreement on all other terms and conditions of the offer and definitive transaction documentation being agreed.”
Union warns over cost cutting
Speaking about the potential takeover, the GMB Union said it must not result in job losses or factory closures.
It warned that both companies are expecting to report on ‘expected synergies’, which it said is often management speak for cost cutting.
Eamon O’Hearn, GMB national officer, said: “This is a massive merger and could possibly pique the curiosity of the Competition & Market Authority’s new boss. Whether it does or not, companies ‘assessing synergies’ is often management speak for cost cutting.
“It is widely acknowledged by government and the wider industry that the UK food and drink industry needs more capacity not less. GMB is calling for a commitment to no factory closures and no job losses.”
