Irish sandwich and ready meals company Greencore has completed its £1.2 billion (€1.4 billion) takeover of British rival Bakkavor.
Greencore and Bakkavor share the many of the same customers among big UK supermarkets – including Tesco, Marks & Spencer, Sainsbury’s, Waitrose and Asda – but have limited crossover in products.
Bakkavor adds pizza, bread, desserts and dips to Greencore’s range, which already spans sandwiches to salads, sushi and ready-made meals.
The enlarged group is expected to generate pro forma revenue of about £4.1 billion (€4.7 billion), with adjusted operating profit of £246.5 million.
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It now employs 28,000 people across 36 manufacturing sites, producing more than 3,200 products across over 20 categories.
Greencore chief executive Dalton Philips said the group will offer a “highly complementary product portfolio” spanning “food for now” and “food for later”, serving all major UK grocery, convenience and travel retail customers.
“Over past months, we have been putting in place plans to integrate the two businesses effectively and our focus now turns firmly to execution and realising the opportunity in advance of us,” he added.
A note published by Investec this week said the transaction makes Greencore the UK market leader across five own-label categories: sandwiches, ready meals, salads, pizza and desserts.
The deal sees existing Greencore investors own 56 per cent of the enlarged group, with Bakkavor investors holding the remainder.
Trading in Bakkavor’s shares has been suspended, and the company will be delisted from the London Stock Exchange on Monday.
The deal was completed on Friday after the UK competition regulator accepted a Greencore proposal made last month to sell its Bristol manufacturing facility, which makes chilled soups and sauces.
The Competition and Markets Authority raised concerns in October that the planned merger would affect competition in the supply of chilled sauces. It gave both companies a week to come up with a solution to address the issues to avert a more intense stage two investigation of the deal.
Bakkavor, founded 40 years ago by Icelandic brothers Agust and Lydur Gudmundsson, sold its Greencore stake at a loss in October 2008 as the Gudmundssons saw their broader business empire come under pressure during the financial crisis.
Bakkavor has announced that the non-executive directors of the group have each tendered their resignation and stepped down from the board of directors.
