A major employer in South Holland has agreed terms leading to a takeover deal.
The cash and shares deal will see Greencore agree the total £1.2bn price for Bakkavor.
The move will see a huge company with a combined turnover of £4bn and a workforce of around 30,500.
Bakkavor is the larger of the two companies and Greencore envisages annual savings of £80m within three years.
“Greencore and Bakkavor have highly complementary product portfolios and a combination of their businesses creates a leading, homegrown UK manufacturing business with a diverse product offering and strong commercial relationships,” the recommendation document says.
Greencore has its headquarters in Dublin and a UK head office in Worksop along with 16 factories and 17 distribution centres employing around 13,300 staff.
Bakkavor has a London HQ and employs 17,200 staff across 40 sites in the UK, US and China with around 20 in this country. It is offloading its China site and if the US business is sold within a year of the takeover, there will be a payment to Bakkavor shareholders.
But the union Unite says it has ‘serious concerns’ about the effective merger.
“Both have a history of paying poverty wages to employees and less competition in the market place is likely to lead to long term wage stagnation and potential redundancies.
“It is also bad news for consumers as, at a time when prices are already rising, fewer competitors in the market will likely lead to faster price rises. Unite is calling for an urgent meeting with both companies’ management teams to address these issues and we will be supporting our members throughout this process,” said Unite national officer for food Bev Clarkson.
The union was involved in lengthy industrial action at Spalding’s Bakkavor factory last year.
“Greencore is a great business that continues to deliver for customers, consumers and shareholders. The strength of our performance has provided the platform to pursue a transformative growth opportunity in the acquisition of Bakkavor,” said Leslie Van de Walle, chair of Greencore.
