Two Icelandic brothers, known as “business Vikings,” are set for a major payday after their ready meals empire, Bakkavor, agreed to a £1.2bn takeover by Greencore, the UK’s largest sandwich maker. The deal will create a £4bn convenience food giant, reshaping the country’s prepared food sector.
A Landmark Deal in UK’s Food Industry
Greencore, a major player in the UK’s food manufacturing industry, had been eyeing Bakkavor for months. Two previous offers were rejected, with Bakkavor arguing they did not reflect the company’s true value. This latest agreement finally sealed the deal, bringing together two industry giants under one umbrella.
The acquisition will combine Greencore’s sandwich and sushi expertise with Bakkavor’s dominance in chilled ready meals, dips, and high-protein salads. This will give the newly formed company a diversified product range and a stronger presence across major UK supermarkets like Tesco, Marks & Spencer, Sainsbury’s, Waitrose, and Asda.
The Gudmundsson Brothers: From Iceland to UK Food Empire
Lýdur and Ágúst Gudmundsson, the Icelandic entrepreneurs behind Bakkavor, have long been recognized for their aggressive business strategies. Dubbed “business Vikings,” they built their company from the ground up, turning it into one of the UK’s largest food suppliers.
They controlled Bakkavor as CEOs from 1986 until 2022 and have remained on the board as non-executive directors. Their influence on the business world extends beyond food, as they were part of a wave of Icelandic investors who made headlines with high-profile acquisitions before the 2008 financial crisis rocked the country’s economy.
What This Means for the Food Industry
This merger signals a significant shift in the UK’s convenience food sector. The combined entity will have a revenue of around £4bn and a presence in almost every major supermarket aisle. More importantly, it reflects a growing trend of consolidation in the food industry, as companies seek economies of scale to offset rising production costs and supply chain pressures.
- Scale Advantage: The deal will allow Greencore and Bakkavor to share manufacturing facilities and streamline operations.
- Retail Power: With a stronger market position, the merged company will have increased bargaining power with supermarket chains.
- Product Innovation: A broader product portfolio could lead to more diverse and innovative food offerings.
The Financial Breakdown: Who Gains What?
Bakkavor shareholders, including the Gudmundsson brothers, stand to benefit significantly from the deal. Under the agreed terms:
| Transaction Terms | Details |
|---|---|
| Cash Offer per Share | 85p |
| Greencore Shares per Bakkavor Share | 0.6 Greencore shares |
| Total Deal Valuation | £1.2bn |
With their majority stake in Bakkavor, the Gudmundsson brothers will see a substantial windfall. Additionally, they are expected to take seats on the board of the newly combined company, ensuring their influence continues.
What’s Next?
While the deal is set to reshape the food-to-go sector, it still needs regulatory approval. The UK’s competition watchdog may take a closer look at how the merger affects market dynamics and pricing for consumers.
For now, the “business Vikings” are celebrating another major business triumph, cashing in on decades of strategic growth. The UK food industry, meanwhile, is bracing for one of the biggest shake-ups in years.
