Icelandic Bakkavor in £485 million swoop for Geest

09/03/05 UK fresh foods giant Geest has been taken over by Icelandic Bakkavor in a £485 million swoop. The move to combine Geest with Bakkavor’s two existing UK businesses Katsouris Fresh Food and Bakkover Birmingham will create a rival to Northern Foods and Uniq in the British convenience food segment. Bakkavor already owns 20 per cent of Geest and has four factories in the UK employing 2300 people.

Geest PLC, is one of the largest fresh prepared foods companies in the United Kingdom and operates 38 factories in five countries, employing approximately 10,000 people. Geest enjoys a key market position in the United Kingdom and has a 40% market share in fresh salads and a 35% market share in fresh pizzas.

Bakkavor Group said in a statement that it will now will be the largest single supplier of fresh prepared foods to British supermarkets and will make over 4,500 products in 16 categories. The company said that its management recognises numerous opportunities resulting from this acquisition. Activities in a number of areas, such as product development and factory specialisation, can be integrated, and there is also considerable potential for utilising economies of scale in areas such as purchasing and packaging. The acquisition of Geest will also provide a platform for Bakkavor Group’s intentions to expand into new markets in Europe and elsewhere. The combined turnovers of the two companies in 2004 was £1,052 million and the combined EBITDA amounted to £99.7 million.

Geest PLC also announced their annual results for 2004, where profits for 2004 fell to £34.4m, from £37.6m a year earlier. Geest’s Chairman, Sir John Banham called the results “a good achievement in a difficult year in which there was an unprecedented level of competition between food retailers.”