Competition watchdog puts Greencore's £1.2bn swoop for Bakkavor under microscope
The Competition and Markets Authority (CMA) said it was looking at possible competition concerns about the takeover, which will create a food-to-go giant with around 30,500 staff.
The CMA is launching a consultation on the tie-up and inviting interested parties to comment by July 22 ahead of any potential investigation.
'The CMA is issuing this preliminary 'invitation to comment' to allow interested parties to submit to the CMA any initial views on the impact that the transaction could have on competition in the UK,' the CMA said.
It added: 'The CMA has not yet launched its formal investigation into this transaction.
'This invitation to comment is the first part of the CMA's information-gathering process.'
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.
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.
The deal saw the groups warn in May over job cuts and factory closures as part of aims to save at least £80 million in costs a year after the tie-up, which sparked trade union concerns.
The firms plan to strip out duplicate headquarters and back office operations, such as administration and support, while they said around 5% of the cost savings would come from reducing combined manufacturing sites, impacting some factory workers.
They estimated that up to around 5% of the total combined workforce could be cut.
However, the firms said they do not expect 'material' redundancies as many of the role cuts will come from not replacing staff as they leave, not filling outstanding vacancies and pausing some hiring plans.
Greencore shareholders will own around 56% of the combined group and Bakkavor the remaining 44% stake following the takeover, which is expected to complete in early 2026 if approved by regulators and shareholders.
The deal comes after Bakkavor had rejected two previous approaches from Greencore.
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