International food firm rejects Greencore acquisition bid
A Greencore factory in Bristol, England. Greencore was founded in 1991 following the privatisation of Irish Sugar. File picture
Irish food manufacturer Greencore said rival firm Bakkavor had rejected two of its bids for a potential acquisition, the latest of which would have valued the acquisition at £1.14bn (€1.4bn).
Greencore approached Bakkavor in recent weeks to express interest in a potential deal. Bakkavor has a market capitalisation of £895m (€1.1bn), while Greencore is valued at £850m (€1.01bn).
Led by Chief Executive Officer Dalton Philips, Greencore remains interested in a deal because of the complementary nature of their businesses and the potential synergies from a merger.
They said the latest proposal, made on March 7, provided a "highly compelling value creation opportunity" for both companies, with bigger scale and cashflows if merged.
The two companies have explored tie-ups in past years that failed to lead to a deal. At one point in 2008, Bakkavor held a roughly 11% interest in Greencore, only to sell the stake months later because of the financial market turmoil.
Greencore was founded in 1991 following the privatisation of Irish Sugar. The Dublin-headquartered company supplies food including sandwiches, chilled prepared meals and cooking sauces to major supermarkets in the UK as well as travel retail outlets and coffee shops.
Bakkavor provides prepared meals, pizzas, bread and salads to groceries such as Tesco, Mark & Spencer and Sainsbury. The UK accounted for about 85% of the company’s total revenue last year, its website shows. Bakkavor also operates in the US and China.
Any deal would require winning over the Icelandic brothers who founded Bakkavor, Agust and Lydur Gudmundsson, who still own about 50% of the company. Agust retired from the chief executive role in October 2022. Lydur served as CEO from 1986 to 2006 and stayed on as non-executive chairman until 2017.
