Greencore has alleviated UK competition concerns regarding its acquisition of convenience food rival Bakkavor by proposing to divest its soups and sauces manufacturing plant.
The deal, announced in March, progresses closer to finalization, targeting completion early next year, following provisional approval of the remedy by the Competition and Markets Authority (CMA).
In a joint statement with Bakkavor on November 7, Greencore announced it is negotiating with prospective buyers for its chilled soups and sauces manufacturing facility located in Bristol, England.
Dublin-based Greencore, similar to UK firm Bakkavor, specializes in food-to-go and convenience products supplied to major supermarkets. The Bristol site, along with related businesses, generates approximately £47 million ($61.5 million) in annual revenue.
During its Phase-one investigation into the merger, the CMA identified a potential competition conflict in the sector of own-label soups and sauces but found no similar concerns regarding ready meals and salads.
Today, the regulator recognized that the Bristol facility represents Greencore’s sole operation in this category, thus proposing to accept Greencore’s offered remedies.
Joel Bamford, CMA’s executive director for mergers, stated: “Following close engagement with Greencore and Bakkavor, we’ve secured remedies to address our competition concerns – we have accepted the remedies in principle and will now work towards a final resolution.”
The CMA specified its prior concerns in chilled sauces, particularly in areas such as pasta and stir-fry sauces, noting that both companies supply major retail chains including Tesco, Sainsbury’s, Asda, Waitrose, and Marks & Spencer.
Conversely, Greencore highlighted that the £47 million revenue derived from the Bristol plant accounted for about 1% of its overall sales for the year ending September 26.
Full-year financial accounts will be available on November 18. However, a trading update in October indicated that Greencore anticipates delivering £1.95 billion in revenue for fiscal 2025, alongside £125 million in adjusted operating profit.
Bakkavor, also listed in the UK, maintained its adjusted operating profit outlook at £120-126 million for fiscal 2025 while refraining from providing a revenue update. Last year, its sales totaled £2.3 billion.
In the recent statement, Greencore CEO Dalton Philips remarked: “The CMA’s acceptance in principle of the remedy is encouraging news, allowing us to aim for completion of the Bakkavor deal in early 2026.”
Philips further stressed the priority of finding a suitable new owner for the Bristol operation.
Bakkavor’s CEO, Mike Edwards, commented that the latest CMA development enhances the certainty that these two excellent businesses will combine successfully.
Post-merger, Greencore shareholders will hold approximately 59.8% of the new company, with Bakkavor investors owning the remainder.
