Pizza giant Dr Oetker is expanding its base after signing a deal to buy The Schwan Food Company's European frozen pizza business, which includes the Chicago Town brand.

Under the terms, agreed this week, Dr Oetker, which makes the Ristorante brand, will acquire Schwan's UK pizza plant in Leyland, Lancashire, Schwan's business in 15 European countries, the Chicago Town trademark and licences for the Freschetta and Tony's trademarks.

The deal will give Dr Oetker 21.1% of the UK frozen pizza market with combined Ristorante and Chicago Town sales of £74.4m, according to the latest Nielsen figures.

The company will integrate the Leyland plant into its UK division and continue production there.

Elsewhere, Schwan's plant in Osterweddingen, Germany will be acquired by the Freiberger Group, which has finalised a supply agreement with Dr Oetker to manufacture branded pizza products to sell across Europe.

"Dr Oetker is the biggest manufacturer of pizza in Europe and the addition of the Schwan's portfolio is complementary to our current range of pizzas," said Peter Franks, UK managing director of frozen and chilled foods at Dr Oetker.

"We feel the acquisition creates a complete frozen pizza business, giving us presence in all sectors of the UK's frozen pizza market and providing us with a UK production base."