The Competition and Markets Authority (CMA) has ruled that Greencore’s £1.2bn acquisition of Bakkavor could lead to "substantial lessening of competition" in the supply of own-label chilled sauces in the UK.

The regulator’s update comes after the conclusion of its Phase 1 investigation into the deal, which stated that the merger would exert some material constraint on weaker competitors.

As a result, Greencore and Bakkavor have until 3 November to offer an undertaking in lieu, which might be accepted by the CMA, to address this substantial lessening of competition.

However, the CMA will refer the merger to an in-depth Phase 2 investigation if the undertaking offered is insufficient to remedy its concerns.

Greencore described the regulator’s overall decision as "positive", adding that both firms will "continue to work constructively" with the CMA to bring these matters to a conclusion.

The transaction is still expected to complete in early 2026.

Chief executive officer at Greencore, Dalton Philips, said: "The CMA process has been constructive and the Phase 1 decision is a welcome one, confirming our view of the highly complementary nature of our businesses and product portfolios across 'food for now' and 'food for later'.

"I'm genuinely excited about what 2026 has in store as we bring these two great businesses together to create a true UK national food champion to deliver high-quality, innovative food to customers and consumers."

CEO at Bakkavor, Mike Edwards, added: "Today's positive news from the CMA is a significant step forward in the process, providing welcome clarity which means we can collectively work at pace and stay on track to complete the transaction in early 2026. Bakkavor is in great shape and we remain excited about joining the Greencore business and unlocking all the associated benefits we have highlighted for colleagues, customers and shareholders."

Following the announcement, shares in Greencore dropped by 1.45%.

Investment director at AJ Bell, Russ Mould, said that the decision by the CMA has "caused a touch of market disquiet".

He concluded: "Given these operations account for a slim percentage of revenues across any combination, coming to an arrangement which the competition authority should not prove too difficult. However, it could still push the timetable for completing the transaction out a little."

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