The Competition & Markets Authority (CMA) has officially launched a Phase 1 investigation into the Greencore-Bakkavor merger.
Seeking to determine if the proposed £1.2bn deal between the prepared food rivals will “result in a substantial lessening of competition”, the CMA said it had now received “the necessary information” to start the first phase of investigation.
A formal review was anticipated by both companies, and has followed a two-month invitation for interested parties to lodge comments with the watchdog.
During phase one, the CMA has 40 days to decide whether the merger will harm competition in the sector. If it decides there is a substantial risk, the CMA then progresses to a 24-week in-depth Phase 2 review.
“The announcement is expected and the CMA process is a normal course of business for a proposed transaction of this nature,” said a Greencore spokesman.
Both Greencore and Bakkavor have said the merger will drive significant benefits for their customers, consumers and the UK economy, and were confident in their ability to secure approval without having to give concessions, known as ‘remedies’, to the CMA.
Bakkavor CEO Mike Edwards said the companies had enjoyed a “period of constructive engagement” with the CMA in the lead-up to the investigation.
“We are pleased they have announced the commencement of a phase one review of the acquisition of Bakkavor by Greencore, as expected,” he said.
“We welcome moving forward to this next step in the process within our anticipated timeline and look forward to continuing to working closely with the CMA over the coming months as it carries out its review.”
Greencore secured a deal in early April, after being rebuffed twice by Bakkavor shareholders. The merger will create a convenience foods giant with combined turnover of around £4bn, supplying all major supermarkets with a combined portfolio of sandwiches, soups, salads, ready meals, pizza and desserts.
No comments yet