Convenience manufacturer Greencore has agreed the terms of a recommended acquisition of Bakkavor Group plc.
The companies said the transaction would create a leading UK convenience food business with a combined revenue of around £4 billion and approximately 30,500 employees.
Under the terms of the transaction, each Bakkavor shareholder will be entitled to the base consideration of 0.604 new Greencore shares and 85 pence in cash for each Bakkavor share held (the “Base Consideration”).
Based on Greencore’s undisturbed closing share price of 190 pence per Greencore share on 13th March 2025 (being the last Business Day before the commencement of the Offer Period), the Base Consideration values each Bakkavor share at 200 pence (the “Offer Value”).
The offer value implies Bakkavor’s entire issued and to be issued share capital is valued at approximately £1.2 billion. Immediately following completion, it is expected that Greencore shareholders will own approximately 56%. and Bakkavor shareholders will own approximately 44% of the combined group.
Dalton Philips, chief executive officer of Greencore, stated: “The combination of Greencore and Bakkavor is an unrivalled opportunity to create a true UK national food champion with an even greater breadth of category range and deeper customer relationships.
“We are bringing together two experienced teams and our complementary portfolios will drive benefits for customers and consumers across the UK. 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. We look forward to welcoming Bakkavor’s employees and creating an exciting, combined business for all stakeholders.
“Bakkavor is the ideal partner for Greencore and we look forward to delivering on the significant growth potential of the enlarged business.”
“The combined business will create more opportunities for colleagues, allow us to do an even better job for customers, and be even more resilient.”
Mike Edwards, Bakkavor CEO, said: “I am proud to have the honour to lead Bakkavor which is a fantastic business, with great people, producing high quality fresh prepared foods, that has strong strategic relationships with some of the best retailers in the world.
“Combining with Greencore would bring together two businesses with the best people in the industry allowing us to take a ‘best of both approach’ to drive performance on every level. The combined business will create more opportunities for colleagues, allow us to do an even better job for customers, and be even more resilient.
“I am confident that the relentless focus that both businesses have on quality, service and innovation, and on striving to be a great place to work, will remain at the heart of the bigger business.”
Greencore achieves growth in H1
For the half year ended 28th March 2025, Greencore saw revenue growth of 6.5% to reach £922 million, and a strong growth in adjusted operating profit of 59.7% to reach £45.2 million. It said this was driven by “disciplined” cost management through “operational and commercial excellence initiatives” and continued growth with customers.
The manufacturer achieved an overall volume growth of 2.5% and an underlying volume growth of 0.5%, ahead of the wider grocery market. It reported that new business was won across food-to-go and in ambient grocery, which it expects to be onboarded in Q3 and Q4 FY25.
Greencore CEO Dalton Philips said: “The Greencore team again made excellent progress in the first half of the financial year, consistently delivering fresh, high quality convenience food to our customers and their shoppers. By continuing to strengthen our core business, we’ve accelerated our financial performance – enhancing returns, improving margins and driving growth ahead of the market. We have built strong momentum and remain committed to continued delivery.
“Our strong first half performance was enabled by continued growth with customers, innovative new products and disciplined cost management, including through operational excellence and automation. The momentum and strength of our business is a credit to all of our Greencore colleagues whose continued dedication and focus has enabled us to deliver this performance.
“While we are mindful of a challenging market environment, and with our seasonally stronger second half still ahead of us, we now expect Adjusted Operating Profit for FY25 to be ahead of previous guidance, in the range of £114-117 million.”
