The Competition & Markets Authority (CMA) has kicked off a preliminary investigation into Greencore’s £1.2bn takeover of rival Bakkavor, which was confirmed in May.
The regulator said it was looking at whether the merger of the two food manufacturing giants would result in a “substantial lessening of competition” in the UK market. It is initially inviting interested parties to comment by 22nd July before officially starting a Phase 1 investigation into the transaction. The CMA noted that the invitation to comment was the first part of its information-gathering process.
The CMA’s announcement yesterday coincided with the day that Bakkavor shareholders voted overwhelmingly in favour of the deal, with 99.98% supporting the offer from Greencore.
Both companies are major suppliers to the supermarket multiples in the UK. Ireland-headquartered Greencore generated sales of £1.8bn last year, producing sandwiches and other convenience and food-to-go items. Bakkavor, which turned over £2.3bn in 2024, supplies soups, ready meals, sauces, salads, and pizza from its 20 factories across the UK.
Greencore has stated that the acquisition will create a leading UK convenience food business with a combined revenue of about £4bn. Both companies’ boards have identified the potential for “substantial synergies” across manufacturing, distribution, purchasing and administrative functions. However, the deal has raised concerns about job cuts and factory closures as part of plans to save at least £80m in costs per year.
The transaction is expected to be completed in early 2026, pending approval by regulators.
NAM Implications:
- This will be a distraction for both parties…
- …and an opportunity for rivals.
- Meanwhile, companies merge to optimise shared resources and assets.
- Along with enlarging and enriching their combined footprint.
- Otherwise, why merge?
