The boards of Icelandic convenience foods group Bakkavor and UK fresh produce and prepared food Geest have reached agreement on terms under which Bakkavor subsidiary Bakkavor Invest will acquire Geest.

"The Proposals are recommended by the board of Geest and value the existing issued share capital of Geest at £485m (US$932m)," Bakkavor said in a statement issued today (Tuesday).

"Together we believe we have the strength to open up new opportunities in existing and new markets both in the UK and overseas," said Agust Gudmundsson, executive chairman of Bakkavor. "We look forward to working with Geest."

"We believe that Bakkavor's proposal represents good value for our shareholders
and we are recommending it," said Geest CEO Gareth Voyle. "The food retailing market has changed dramatically in the last two years and, whilst Geest is well positioned, there is no doubt that price competition will continue to dominate the day-to-day grocery trade."