The two boards have agreed on the key financial terms of a deal, which would see the creation of a combined convenience foods business with a turnover of around £4 billion.
It was reported last week that Greencore had returned with a third offer after its second offer of around £1.14 billion was rejected on 10 March.
The transaction remains conditional on agreement being reached on the other terms of the offer, as well as regulatory clearance.
The bid values Bakkavor at 85 pence per share, in addition to 0.604 Greencore shares for each share held – an approximate total value of £1.2 billion. The Bakkavor board decided unanimously to recommend the offer to its shareholders.
Under the terms of the deal, Greencore shareholders would own approximately 56% of the combined group, with Bakkavor shareholders owning the remaining 44%.
Greencore upgraded its profit expectations yesterday after maintaining sales momentum during Q2, but noted that the news was not related to a potential deal with Bakkavor.
For the year ending 26 September 2025, the firm anticipates that operating profit will be in the range of £112 million to £115 million.
Background
Headquartered in Dublin, Greencore supplies all major supermarkets in the UK with products including sandwiches, salads, sushi, soups and sauces.
Meanwhile, Bakkavor operates 41 sites across the UK, US and China, while it employs close to 17,200 people. It supplies around 3,500 products across a variety of categories to all the major UK supermarkets, with 85% of revenue derived from its UK operation.
In the 12 months up to 28 December 2024, the firm reported revenues of £2.3 billion.
Speaking to Food Manufacture last month after Greencore’s second bid was rebuffed, food analyst Julian Wild said a deal between the firms was a matter of time.
“I think Greencore and Bakkavor coming together is a deal which must happen at some stage,” Wild said prophetically.
"Greencore cannot lose out again. In my view this is just about the price and there will be a deal.”
