CMA Flags Concerns Over Greencore-Bakkavor Merger

Published: ২৭ October 2025. The English Chronicle Desk. The English Chronicle Online.

Britain’s competition watchdog has raised concerns over the proposed £1.2bn merger between Greencore and Bakkavor, warning that the deal could harm competition in the chilled sauces market. The Competition and Markets Authority (CMA) said the tie-up between the two major convenience food manufacturers—both of which supply ready-to-eat meals, sandwiches, and salads to some of the UK’s largest supermarkets—could lead to reduced consumer choice and higher prices.

Greencore, the UK’s largest sandwich maker, announced in April that it had agreed to acquire Bakkavor, its closest rival in the prepared food sector. Together, the companies plan to form a convenience food powerhouse with an estimated combined revenue of £4bn. Both firms are key suppliers to leading supermarket chains including Tesco, Sainsbury’s, Marks & Spencer, Waitrose, and Asda, making the merger one of the largest in the British food manufacturing industry in recent years.

After completing its initial phase one review, the CMA said the proposed acquisition could result in a “substantial lessening of competition” in the market for supermarket own-label chilled sauces. The regulator’s findings suggest that by combining the two companies’ operations, the merged entity could gain too much control in this niche category, potentially reducing competition for contracts with major UK retailers.

The watchdog has given Greencore and Bakkavor until 3 November to respond with measures that address its concerns. If the companies fail to satisfy the CMA, the merger will move to a more detailed phase two investigation, which could delay the deal for several months and potentially impose conditions or divestment requirements.

Despite the regulator’s findings, both companies sought to downplay the implications, emphasizing that the CMA’s objections relate to a very small portion of their overall business. In a joint statement, Greencore and Bakkavor noted that the regulator had not raised any concerns regarding 99% of the combined group’s projected revenues. The CMA found no significant risk to competition in the markets for Italian chilled ready meals or own-label salads, leaving chilled sauces as the only area under scrutiny.

Dalton Philips, chief executive of Greencore, described the CMA’s review as “constructive” and expressed optimism that the merger would proceed as planned. “We are really grateful to our colleagues at Greencore and Bakkavor for successfully getting us to this point,” Philips said. “We’re now working closely with the CMA and Bakkavor to ensure that this transaction is completed for the benefit of all stakeholders early next year.”

Mike Edwards, Bakkavor’s chief executive, welcomed what he called “welcome clarity” from the CMA. “This means we can collectively work at pace and stay on track to complete the transaction in early 2026,” he said, suggesting confidence that the companies will be able to satisfy the regulator’s competition concerns.

Analysts at RBC Capital Markets also sought to reassure investors, pointing out that chilled sauces account for just 1% of the companies’ combined revenues. The analysts noted that while both firms supply pasta sauces to large supermarket chains, their primary businesses remain focused on sandwiches, salads, and ready meals—sectors that have not been flagged by the CMA as problematic.

Nevertheless, investor sentiment appeared cautious. Shares in Greencore, which is headquartered in Dublin but listed on the London Stock Exchange, slipped around 2% in early Monday trading. The company employs approximately 13,300 staff and operates 14 factories across the UK.

Bakkavor, by contrast, employs about 14,900 people and runs more than 30 production sites in the UK and the US. Founded in 1986 by Icelandic brothers Lýdur and Ágúst Gudmundsson—nicknamed “the Bakka brothers” and often referred to as “business Vikings”—the company has grown from a small family enterprise into one of Britain’s leading food manufacturing giants. Although the Gudmundsson brothers stepped back from day-to-day operations in 2022, their influence remains woven into the fabric of the company’s identity.

If the merger goes ahead, it would mark a significant consolidation within the UK’s convenience food sector, potentially reshaping the supply landscape for supermarket ready meals and chilled products. Industry experts suggest that while the deal makes strategic sense for both companies—allowing them to pool resources, streamline logistics, and better withstand inflationary pressures—the CMA’s focus on competition underscores growing regulatory scrutiny of mergers in sectors affecting everyday consumers.

The CMA has been particularly vigilant in recent years, blocking or conditioning several high-profile deals in the retail and food industries over fears of market dominance. As the watchdog continues to monitor mergers that could impact prices and product availability for consumers, the Greencore-Bakkavor deal has become the latest test of how far UK regulators are willing to go to preserve competition in essential consumer markets.

Both companies remain publicly confident, maintaining that the combination will create a stronger, more efficient business capable of driving innovation and growth across the UK’s food industry. However, as the November deadline approaches, all eyes will be on the CMA’s next move—and whether Britain’s two biggest convenience food producers can persuade regulators that bigger can still mean better for consumers.