Convenience food manufacturer Greencore is to purchase chilled food specialist Bakkavor for £1.2bn, creating a UK food business with a combined revenue of £4bn.

The two food-to-go giants have today (2 April) announced that they have reached an agreement in principle for the acquisition, after Bakkavor previously rejected Greencore’s offer on two occasions, including a £1.1bn proposal in March.

Under the proposed deal, Greencore shareholders would own approximately 56% and Bakkavor shareholders would own approximately 44% of the combined group.

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For every share they hold, Bakkavor shareholders would be entitled to receive 85 pence in cash and 0.604 Greencore shares. Bakkavor shareholders would also be entitled to potential additional cash if its US business is sold before 30 June 2026.

The companies cited benefits including a “diverse product offering and strong commercial relationships, managed by a broader set of customer dedicated teams and highly competitive capabilities in attractive segments across the UK”, as reasons to push ahead with the deal.

The news comes a day after supermarket sandwich supplier Greencore increased its profit guidance as it experienced “strong revenue and volume momentum” in its second quarter to 28 March 2025.

Last month, Bakkavor also reported a “strong performance” in 2024 as sales and profits increased, despite facing challenges late last year with prolonged industrial action by its factory workers.