Two Icelandic brothers, known as “business Vikings,” are set to make millions after their ready meals company, Bakkavor, agreed to a takeover deal with their competitor, Greencore. This move is expected to create a £4 billion food-to-go giant.
Greencore, the UK’s largest sandwich maker, has agreed to acquire Bakkavor in a deal valuing the company at £1.2 billion.
Greencore’s earlier bids for Bakkavor were rejected because the company deemed them undervalued.
Greencore specializes in prepared food and employs around 13,300 staff across its 14 factories in the UK, producing items such as sushi and chilled ready meals for major supermarkets.
Bakkavor generates 85% of its revenue in Britain, manufacturing products for notable supermarkets like Tesco, Marks & Spencer, Sainsbury’s, Waitrose, and Asda. The company produces various products, including dips, hummus, high-protein salads, and “Gastropub” ready meals.
The combined companies will form a £4 billion UK convenience food business, offering a diverse range of products.
Bakkavor was founded by brothers Lýdur and Ágúst Gudmundsson, known as the “Bakka brothers,” who served as the chief executives of the business from 1986 until 2022.
The term “business Vikings” describes Icelandic financiers known for acquiring European businesses using debt. Iceland’s economy became a symbol of the global financial crisis in 2008.
The brothers still sit on the company’s board as non-independent non-executive directors and own over half of the company.
Under the cash and share deal, Bakkavor shareholders will receive £0.85 in cash per share and 0.6 Greencore shares, potentially resulting in a substantial payout for the Gudmundsson brothers.
They are expected to become non-executive directors on the board of the combined group.
Greencore’s offer represents a 32.5% premium to Bakkavor’s closing share price on 13 March, the day before the offer period began. Greencore shareholders will own approximately 56% of the combined group, while Bakkavor’s investors will own the remaining 44%.
The deal is still subject to approval from Bakkavor’s shareholders at their annual meeting in May.
Bakkavor went ahead with its float on the London Stock Exchange in 2017, just days after shelving plans to list due to market volatility.
Lýdur Gudmundsson was found guilty of financial crime in Iceland in connection with his investment in the failed Icelandic bank Kaupthing during the country’s 2008 financial crisis.
