Dublin-headquartered Greencore - a leading pre-packed sandwich maker - has agreed a landmark £1.2 billion acquisition of rival UK convenience food giant Bakkavor, just weeks after the London-based company publicly rejected a lower takeover offer. The deal marks a major turning point in the UK’s chilled food landscape, creating a new powerhouse with combined revenues of approximately £4 billion.
The proposed merger comes at a time when the London Stock Exchange is witnessing a flurry of consolidation activity, driven in part by depressed company valuations. Greencore’s offer of 200 pence per share represents a 33% premium to Bakkavor’s closing share price of 151p on 13 March, the day of Greencore’s initial approach.
From rejection to recommendation
Just two weeks earlier, Bakkavor had rejected the 189p per share bid, arguing the offer ‘significantly undervalued’ the FTSE 250-listed group. That stance seems to have softened following Greencore’s improved bid of 85p in cash plus 0.604 Greencore shares per Bakkavor share. The new offer - structured as a cash and stock deal - has prompted Bakkavor’s board to indicate it is now ‘minded unanimously to recommend’ the offer to its shareholders.
Subject to shareholder and regulatory approvals, the deal would give Greencore shareholders a 56% stake in the newly combined entity, with Bakkavor shareholders owning the remaining 44%.
Strategic synergies & scale
Greencore’s management has highlighted ‘substantial synergies’ across both organisations’ manufacturing, distribution, purchasing and administrative functions.
The Irish company’s dominance in sandwiches is a natural complement to Bakkavor’s strength in readymeals, soups, salads and pizzas. Bakkavor’s extensive retail footprint – across the UK’s biggest retailers, including Tesco, Sainsbury’s, Marks & Spencer and Waitrose, along with international exposure, particularly in the US and China – will create a one-stop-shop for major grocers looking for scale, innovation and speed in their food-to-go supply.
The combination promises to enhance operational efficiencies, streamline supply chains and unlock new product development opportunities. Importantly, Greencore is looking to improve employee career prospects through an expanded group footprint.
Activist pressure & market timing
The agreement comes amid mounting pressure on Greencore to accelerate its turnaround and deliver higher shareholder returns. Hong Kong-based Oasis Management, the company’s largest shareholder, had previously called for faster execution on strategic priorities. The deal is likely to be viewed as a bold response. Greencore’s share price has climbed more than 40% in the past year, while Bakkavor’s has surged over 60%.
But while the merger has clear financial and strategic benefits, challenges remain. Integrating two large and complex chilled food operations will require careful alignment across different corporate cultures, systems and production sites. Labour relations could also be a flashpoint. In November, Bakkavor experienced strike action over pay, resulting in supermarket shortages of key items like taramasalata. Any disruption in the combined group could have knock-on effects for supply reliability - critical in the ultra-competitive chilled convenience market.
Additionally, navigating regulatory scrutiny - particularly around competition law - will be essential. The UK’s Competition and Markets Authority (CMA) is likely to take a close look at the merged group’s market share in categories like ready meals and sandwiches.
A new chapter in convenience
If approved, the deal will create a dominant force in UK chilled convenience food and a formidable supplier to retailers looking to streamline sourcing amid continued inflationary pressures and evolving shopper habits. From office workers grabbing a quick lunch to families seeking premium ready meals, the new Greencore-Bakkavor entity aims to meet rising consumer demand for fresh, fast and flavourful food-to-go options.
This acquisition also has global implications. Bakkavor’s operations in the US and China could provide Greencore with new international growth avenues at a time when UK food manufacturers are increasingly looking beyond domestic borders.
The deal is in the ‘agreement in principle’ phase, but both companies appear aligned in vision and ambition. Assuming shareholder approval and regulatory clearance, the newly merged group could be operating as a single entity by the second half of 2025.
