Supermarket sandwich megadeal probed by competition watchdog
- FTSE 250 Greencore agreed takeover of Bakkavor in April
The £1.2billion tie-up of supermarket sandwich makers Greencore and Bakkavor is being probed by Britain’s anti-trust watchdog.
FTSE 250-listed Greencore’s acquisition of is rival, announced in early April, is set to create a UK food-to-go giant with a combined revenue of around £4billion.
But unions have warned the deal could result in up to 1,500 job losses as well as factory closures.
The Competition and Markets Authority on Tuesday launched an ‘invitation to comment’ ahead of a formal investigation into the deal.
The regulator said it was concerned the deal could result in a ‘substantial lessening of competition within any market or markets in the UK for goods or services’.
Greencore is a prepared food specialist, which supplies all major supermarkets, including Marks & Spencer.
Tie-up: Greencore’s acquisition of Bakkavor is set to create a UK food-to-go giant with a combined revenue of around £4billion
The group, which has its headquarters in Dublin, with a British head office in Worksop and 14 factories, supplies nearly 750million food-to-go items each year and employs around 13,300 staff.
London-based Bakkavor employs 17,200 staff across 41 locations in Britain, the US and China.
It makes around 3,500 different freshly prepared food products, including meals, salads, desserts, dips, sauces, sandwiches, and pizza and bread products.
Under the terms of the potential deal, Greencore shareholders would own around 56 per cent of the combined group and Bakkavor shareholders would own about 44 per cent.
The CMA’s invitation to comment will close on 22 July, at which point it will consider a formal investigation.
Bakkavor and Greencore each declined to comment further but highlighted previous commentary on the rationale behind the deal.
Greencore boss Dalton Philips has previously described the combination as ‘an unrivalled opportunity to create a true UK national food champion with an even greater breadth of category range and deeper customer relationships’.
He said: ‘We are bringing together two experienced teams and our complementary portfolios will drive benefits for customers and consumers across the UK.’
Bakkavor chief executive Mike Edwards has previously said the combined business ‘will create more opportunities for colleagues, allow us to do an even better job for customers, and be even more resilient’.
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