UK logistics company Exel has made a recommended £328m bid for its closest rival Tibbett and Britten (T&B) in a deal which would create a global business with a turnover of £6.7bn.
Exel has put in a cash offer for T&B, whose customers in the UK include Asda, Sainsbury, Tesco and the Big Food Group. T&B also has contracts in mainland Europe with McCain, Wal-Mart, Spar and Coca-Cola among others which Exel hopes to continue.
It said the purchase would strengthen the company in key developing markets, including the Czech Republic, Hungary, Poland, Romania and Slovakia. The newly enlarged company could also cut costs by £15-20m a year by removing duplication and reducing overheads, said Exel.
Director of corporate affairs John Dawson said the move would improve the supply chain and make costs more transparent.
T&B directors will recommend that shareholders accept the offer at a meeting later this summer.
Meanwhile, Exel has won a £3.4m, one-year contract to handle products imported by Somerfield. It said the deal, which covers canned foods, wines, spirits and non-food items, would save Somerfield £1.5m in the year.