Greencore Group plc (LSE: GNC) shares dip after CMA clears 99% of Bakkavor deal: Will early 2026 closure revive the rally?

Greencore Group plc (LSE: GNC) shares closed 1.61 percent lower at 244.00 GBX on the London Stock Exchange on October 27, 2025, despite securing a largely favourable ruling from the United Kingdom’s Competition and Markets Authority (CMA) in relation to its proposed acquisition of Bakkavor Group plc. The Phase 1 decision, which determined that approximately 99 percent of the combined revenue base poses no competitive concerns, was widely seen as an endorsement of the strategic merger. However, with a narrow concern flagged around the UK supply of own-label chilled sauces, the transaction must now pass a remedy phase before final approval.

The decline in share price follows a brief period of consolidation in the 240 to 250 GBX range, suggesting investors are taking a wait-and-see approach until the CMA accepts or modifies the proposed remedies. At current levels, Greencore Group plc remains more than 40 percent above its April 2025 lows, reflecting broad institutional support for the Bakkavor acquisition, even as headline volatility keeps intraday sentiment cautious.

The company’s trading update, coupled with the regulatory clearance covering the vast majority of product lines, positions the deal to close in early 2026. While the chilled sauces segment is now under further scrutiny, both parties have expressed optimism about resolving the issue without the need for a Phase 2 investigation, which would extend the timeline by several months.

What did the CMA decide and how does it impact the Greencore–Bakkavor transaction structure?

The CMA launched a Phase 1 review into the proposed acquisition on September 1, 2025. The transaction, which seeks to combine Greencore Group plc’s dominance in convenience and food-to-go categories with Bakkavor Group plc’s strength in chilled meals and own-label manufacturing, was expected to face detailed competition analysis given the scale of market overlap.

In its 27 October decision, the CMA found that the merger does not raise competitive concerns for approximately 99 percent of the product lines and revenue categories involved. The only area where the regulator found a “realistic risk of competition concern” was in the supply of own-label chilled sauces to UK grocery retailers. This segment, while not a core driver of earnings, does represent a relevant horizontal overlap between the two firms’ portfolios.

Crucially, the CMA has provided Greencore Group plc an opportunity to avoid a full Phase 2 probe by submitting proposed remedies. These remedies, expected to be either behavioural commitments or possible divestments within the chilled sauces vertical, would need to sufficiently address the regulator’s concerns without undermining the broader strategic rationale of the deal.

How are Greencore and Bakkavor framing the strategic benefits of the proposed merger?

Greencore Group plc Chief Executive Officer Dalton Philips welcomed the CMA’s Phase 1 findings as a validation of the merger’s industrial logic. He reiterated that the integration of Greencore Group plc and Bakkavor Group plc is about building a “true UK national food champion,” capable of serving customers in both “food for now” and “food for later” categories. Philips added that the businesses are complementary across their portfolios and operations, and that the combined platform would enhance innovation, resilience, and consumer choice.

Bakkavor Group plc Chief Executive Officer Mike Edwards said the CMA’s update brings clarity to the transaction timeline and underpins confidence in the completion outlook. He also emphasized the benefits that the merger could unlock across customer delivery, employee development, and shareholder value creation. Both leaders praised their respective teams for bringing the deal to such an advanced stage and reaffirmed their commitment to completing the transaction in early 2026.

In market terms, the merger is expected to drive scale benefits in procurement, unlock efficiencies in chilled manufacturing, and create a consolidated platform for negotiating with major retailers. Some analysts have also pointed to the potential for vertical integration in logistics and distribution, especially as supply chain dynamics remain volatile across the UK grocery ecosystem.

How are institutional investors interpreting the latest CMA update and what does the recent share price movement suggest about confidence in the Greencore–Bakkavor deal timeline?

Despite the largely favourable CMA outcome, Greencore Group plc shares declined by 4.00 GBX on October 27, closing at 244.00 GBX. This marked a 1.61 percent drop for the day, even as the stock traded in a tight range between 241.00 GBX and 251.00 GBX. The pullback may reflect a modest degree of caution as investors wait to assess the structure and acceptance of the proposed CMA remedies.

From a technical standpoint, the 240.00 GBX level now represents near-term support, having served as a base for multiple rallies since early October. A break below this range could signal a short-term bearish shift, while a close above 255.00 GBX may suggest renewed institutional buying. The share’s 12-month chart shows a steep recovery from a sub-170 GBX bottom earlier this year to highs above 270 GBX in August, driven in part by the Bakkavor transaction’s perceived upside.

Traders are monitoring not just CMA milestones but also broader factors such as Q4 performance trends, cost inflation exposure, and retailer demand forecasts ahead of the 2025 holiday season. So far, Greencore Group plc has benefited from strong retail partnerships and expanding private-label contracts, which have provided a buffer against macroeconomic headwinds.

How will the CMA remedies process unfold from here, and what does the current regulatory timeline indicate about the likelihood of the Greencore–Bakkavor transaction completing in early 2026?

Following the Phase 1 outcome, Greencore Group plc must now formally propose remedies to the CMA to address the chilled sauce segment concerns. If accepted, the deal will move directly to completion without the need for a Phase 2 investigation. If the CMA deems the remedies insufficient, the transaction could face a deeper review lasting several months.

Both companies reiterated that they remain on track for closing in early 2026, in line with earlier guidance. No changes to the transaction’s financial terms or structure have been proposed, and there is no indication that deal financing or shareholder approvals are at risk.

While the companies did not release specific details about the remedy package, precedent suggests options may include divesting a small subset of facilities or establishing ring-fenced operating agreements to maintain competitive supply dynamics in the sauce category. Institutional investors are likely to scrutinize the final structure closely to ensure that margin-accretive segments are preserved post-deal.

How does this deal fit into the broader M&A narrative within the UK food and grocery sector?

The Greencore–Bakkavor deal is emblematic of a larger consolidation trend within the UK food production and private-label manufacturing space. As consumer inflation squeezes discretionary spending, supermarket chains are increasingly leaning on their own-label partners to offer affordable yet premium-quality alternatives to branded goods. This dynamic has made companies like Greencore Group plc and Bakkavor Group plc central to the future of food retail supply chains.

In this context, the merger serves both defensive and offensive purposes. It consolidates operational capabilities across fresh food categories and allows for deeper partnerships with large retail accounts. It also provides scale advantages in sourcing, packaging, and innovation pipelines, especially for categories like ready meals, salads, and sandwiches where speed-to-shelf matters.

Analysts expect the deal to trigger further activity in the sector, as mid-sized players face increasing pressure to either scale up or specialize. Private equity interest in food manufacturing has also remained high, driven by stable cash flows and the post-pandemic resilience of grocery consumption patterns.

Could the chilled sauces remedy requirement meaningfully impact synergy realization?

While the chilled sauces segment is the only area singled out by the CMA for potential remedies, it is not considered a primary driver of the merger’s economics. However, any structural remedy such as divestiture or volume caps could reduce operational leverage in that category.

From a financial standpoint, the combined entity is expected to benefit from cost synergies, margin enhancement, and better negotiating power. If the chilled sauces remedy is behavioural rather than structural—such as a supply commitment or pricing framework—the impact is likely to be minimal. Still, investors will want clarity on the scope and duration of the proposed remedies before adjusting earnings forecasts.

Assuming the CMA accepts the proposed remedies, the remainder of the regulatory path is relatively clear. The transaction does not involve foreign jurisdictions or require multi-country approvals, making the UK CMA the sole gatekeeper.

Key takeaways from Greencore’s CMA update and the current share price reaction

• Greencore Group plc received a largely favourable Phase 1 decision from the Competition and Markets Authority, which found no competition concerns across approximately 99 percent of the combined revenue base with Bakkavor Group plc.
• The only area requiring further attention relates to the supply of own‑label chilled sauces in the UK, and Greencore Group plc now has the opportunity to submit remedy proposals instead of entering a full Phase 2 investigation.
• Both Greencore Group plc and Bakkavor Group plc reiterated that the merger continues to align with their strategic objective of creating a national-scale prepared food manufacturing leader across “food for now” and “food for later” categories.
• Greencore Group plc shares declined to 244.00 GBX despite the positive regulatory outcome, reflecting short‑term investor caution as markets await clarity on the scope and acceptance of the proposed remedies.
• The share price remains above key support levels observed in mid‑October, suggesting that medium‑term institutional conviction in the acquisition remains intact, although near‑term trading conditions may stay sensitive to regulatory sequencing.
• The companies continue to expect completion of the transaction in early 2026, pending CMA approval of the remedy structure and final procedural clearances.