Convenience food manufacturer Greencore (GNC.L) said on Thursday it had agreed to the terms of a recommended acquisition of UK fresh food provider Bakkavor Group (BAKK.L), in a deal valued at 1.2 billion pounds ($1.59 billion).
In April, the parties said they had reached an agreement in principle on the key financial terms of a possible cash and share offer by Greencore for Bakkavor.
The offer base consideration comprises 0.604 new Greencore shares and 85 pence in cash, valuing each Bakkavor share at 200 pence, with potential for further value if there is a sale of Bakkavor's U.S. business, Greencore Group said on Thursday.
Bakkavor, which sells products such as soups, dips, salads, desserts, pizzas and breads, had been reshaping its businesses across the UK, China and the U.S. to cope with steep costs, subdued consumer demand and reduced volumes.
Bakkavor's retail customers include Tesco (TSCO.L), M&S (MKS.L) and Waitrose, while Greencore supplies all major UK supermarkets.
Greencore has received binding commitments from certain Bakkavor shareholders, who have committed to sell about 69.4% of all Bakkavor shares, it said.
On completion of the deal, Greencore shareholders are expected to hold about 56% and Bakkavor shareholders will own around 44% of the combined entity.
($1 = 0.7528 pounds)
