So, what now lies ahead for Greencore, the Ireland-based convenience food group?
Almost five months ago, Greencore announced plans to merge with UK rival Northern Foods and create Essenta Foods, a business that would generate annual sales of GBP1.7bn (US$2.73bn) and become an own-label supplier to serve the country’s powerful supermarkets.
However, a rival suitor for Northern emerged in the form of UK poulty-to-fish processor Boparan Holdings, which in January tabled a GBP342m takeover bid that was accepted by the Northern board and, ultimately, dashed Greencore’s hopes of merging with the Fox’s biscuits and Goodfella’s pizza maker.
Last week, Greencore decided against making another bid for Northern. The Irish company had been in talks with an unnamed partner to devise a fresh bid but failed to win over the trustees of Northern’s pension fund, leaving the way clear for Boparan to buy the business. Boparan has secured the backing of around 50% of Northern shareholders and is looking to win the support of 75% of investors by the time is bid expires on Wednesday (16 March).
As we reported on Friday, some industry watchers believe Boparan could look to sell off brands like Fox’s and Goodfella’s to ease the financial burden of buying Northern. However, the jury is out on Boparan’s Northern ambitions. Others see a split of Northern’s business as unlikely.
As for Greencore, it is highly likely that it will look for other acquisitions. Even as Greencore was considering whether bid again for Northern, analysts were studying possible options for the business, with Premier Foods plc’s own-label division Brookes Avana held up as a possible target.
While Greencore’s decision to walk away meant one mooted deal in the UK food sector was scrapped last week, another was sealed with the completion of Premier’s sale of its meat-free business to Exponent Private Equity.
The deal has led to the creation of Quorn Foods, a business that will sell meat-alternative products under the Quorn and Cauldron brands. Quorn Foods is headed up by ex-Premier and Kellogg executive Kevin Brennan.
Last week, we interviewed Brennan about the prospects for Quorn Foods, a business that has struggled with supply-chain issues and a stagnant meat-free sector in the UK in recent months but is now enjoying a return to growth domestically.
Brennan explained that Quorn Foods is also eyeing growth overseas and is targeting expansion in current export markets like the US and Australia.
Quorn Foods is not the only UK food manufacturer witnessing growth in international markets. Data issued by the Food and Drink Federation today showed that UK food and drink exports broke the GBP10bn barrier for the first time in 2010, driven by shipments of dairy, seafood, meat and prepared foods.
The numbers were announced at the IFE food-industry exhibition in London today, a biennial event that attracts suppliers from around the UK, Europe and beyond. just-food is carrying the latest news and views from the show, so be sure to check our pages over the next couple of days.