Greencore-bakkavor Merger: Cma Raises Concerns In Chilled Sauces But Not Ready Meals

1 month ago

The mixed entity would go 1 of nan largest suppliers of own-label chilled sauces, arsenic per nan CMA.

Greencore’s takeover of private-label nutrient rival Bakkavor has raised title concerns by nan UK watchdog successful chilled sauces but not for fresh meals and salads.

As portion of its alleged Phase-one investigation, nan Competition and Markets Authority (CMA) said coming (27 October) that nan merger could lead to a “substantial lessening of competition” successful own-label chilled sauces.

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However, nan CMA has recovered nan deal, first revealed successful March betwixt Ireland-headquartered Greencore and UK-based Bakkavor, does not raise akin concerns from “horizontal unilateral effects” successful private-label Italian chilled fresh meals aliases successful own-label salads.

The regulator added it has fixed nan 2 parties until 3 November to connection remedies that will allay those title concerns successful chilled sauces.

A brace of companies – 2 Sisters Food Group and Billington Foods – were identified by nan CMA arsenic “material” competitors successful sauces wrong nan UK market, though some were deemed arsenic “weaker” by nan regulator.

In Italian fresh meals, nan CMA explained nan merger would beryllium “constrained” by different “established suppliers” specified arsenic Oscar Mayer and Samworth Brothers, on pinch 2 Sisters and Pilgrim’s Pride, which are mostly focused connected repast ranges for illustration Asian foods.

A nonaccomplishment by Greencore and Bakkavor to supply remedies successful chilled sauces could lead to a much in-depth Phase-two investigation by nan CMA.

For private-label salads, nan regulator said nan merger would besides beryllium constrained by Samworth Brothers, Avondale Foods and Natures Way Foods.

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In response, Greencore and Bakkavor said successful a associated connection that they will some activity “constructively” pinch nan CMA to resoluteness nan rumor raised successful chilled sauces arsenic they activity to finalise nan merger successful “early” 2026.

Dalton Philips, CEO of Greencore, said: “The CMA process has been constructive and nan Phase-one determination is simply a invited one, confirming our position of nan highly complementary quality of our businesses and merchandise portfolios crossed “food for now” and “food for later”.

The connection added that nan “CMA agreed pinch Greencore and Bakkavor that nan transaction does not raise immoderate title concerns successful narration to astir 99% of nan revenues of nan mixed group”.

The deal, which would create a private-label business pinch an estimated £4bn ($5.3bn) successful revenue, has already received beardown support from Bakkavor shareholders, pinch 99.98% voting successful favour.

Greencore’s board person besides approved nan transaction.

Mike Edwards, CEO of Bakkavor, added successful today’s statement: “Today’s affirmative news from nan CMA is simply a important measurement guardant successful nan process, providing invited clarity, which intends we tin collectively activity astatine gait and enactment connected way to complete nan transaction successful early 2026.”

Greencore, headquartered successful Dublin, secured statement successful rule from Bakkavor’s committee successful April aft 2 erstwhile bids were rejected, pinch nan rate and stock deal being formalised successful May.

One imaginable situation for nan merger is nan imaginable of occupation losses.

Greencore has estimated that up to 5% of nan mixed workforce, perchance affecting 1,525 employees, could look redundancies owed to agency and mill consolidations.

Bakkavor would adhd pizza, breads, desserts, and chilled dips to Greencore’s portfolio, complementing its existing scope of products including sushi, chilled snacks, quiche, soups, sauces, pickles, and Yorkshire puddings.

Both companies compete pinch branded manufacturers successful nan ready-meals category. Other overlapping segments see sandwiches and prepared salads, which are supplied to supermarkets nether own-label food-to-go offerings.

Bakkavor besides produces bagged salads for nan awesome supermarket chains.

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