Greencore edges forward in £1.2bn Bakkavor deal after agreeing to sell factory

Supermarket sandwich supplier Greencore’s £1.2 billion deal to buy rival Bakkavor has taken a step forward after the UK’s competition watchdog provisionally accepted the firm’s proposal to sell off its sauces and soups factory.

The Competition and Markets Authority (CMA) said it was planning to accept the measure put forward by the two firms to allay its concerns over the takeover.

Ireland-headquarterd Greencore said it would sell its only chilled soup and sauces plant in Bristol after the CMA raised concerns that the takeover could result in the “substantial lessening of competition” for the supply of chilled supermarket sauces, which could push up prices.

It is now in talks with a number of possible buyers for the site, which made sales of around £47 million in the year to September 26 – around 1% of the revenues of the combined group.

The regulator said it believes the move could resolve its concerns and will now consult further on the package of remedies.

It sees the firms clear a major hurdle for the takeover, with the pair now hoping to complete the deal in early 2026.

The tie-up, structured as a reverse takeover, was agreed in May and will form a combined food group with annual sales of about £4 billion which supplies many of the UK’s biggest supermarkets and retailers.

Joel Bamford, executive director of mergers at the CMA, said: “The cost of our weekly shop matters to us all, so we must take decisions that ensure there is effective competition helping to keep product prices as low as possible on supermarket shelves.

“Our assessment found Greencore’s deal to buy Bakkavor could raise prices at the till.

“Following close engagement with Greencore and Bakkavor we’ve secured remedies which we believe have the potential to address our competition concerns – so we have accepted the remedies in principle today and will now work to towards a final resolution.”

Dalton Philips, chief executive of Greencore, said the CMA’s acceptance of the remedies put forward was “really good news”.

He said: “Our focus is on finding the right new owner for our Bristol business.

“It’s been great to see such strong interest shown in what is a fantastic chilled soups and sauces operation, and I’m highly confident we’ll get a good outcome here.”

He added: “Both teams are already collaborating really well on integration plans, and we’ll be ready to hit the ground running once the deal completes in early 2026.”

Mike Edwards, chief executive of Bakkavor, said the CMA’s acceptance in principal “gives us even greater certainty that we will bring these two brilliant businesses together”.

Greencore is a prepared food specialist, which supplies all major UK supermarkets, as well as the likes of Marks & Spencer.

It has its headquarters in Dublin, with a UK head office in Worksop and 16 factories across the UK, as well as 17 distribution centres.

The group supplies nearly 750 million food-to-go items each year and employs about 13,300 staff.

London-headquartered Bakkavor employs around 17,200 staff across 40 sites in the UK, US and China, with about 20 factories in the UK.

It makes around 3,100 different freshly prepared food products, including meals, salads, desserts, dips, sauces, sandwiches, and pizza and bread products.