UK CMA launches phase 1 probe of Greencore acquisition of Bakkavor
The UK Competition & Markets Authority on Monday confirmed it has launched a formal phase 1 inquiry into the acquisition of Bakkavor Group PLC by Greencore Group PLC.
The two convenience food providers, both FTSE 250 index constituents, had announced their agreed merger back in May. Dublin-based Greencore will buy London-based Bakkavor in a cash-and-shares deal that valued Bakkavor at £1.2 billion at the time. Greencore will pay 85 pence in cash, plus 0.604 of a new Greencore share for each Bakkavor share.
Greencore shareholders will own 56% of the enlarged company, and Bakkavor shareholders 44%.
Greencore shares were down 0.2% to 249.00p early Monday in London. Bakkavor shares were flat at 229.00p. Greencore currently has a 1.13 billion market capitalisation to Bakkavor’s £1.35 billion.
The CMA back in July had said it was considering a formal investigation of whether the merger will result in ‘a substantial lessening of competition’ in the UK. It has until October 27 to release its phase 1 decision.
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