Greencore and Northern Foods to merge

The company behind Fox’s biscuits and Goodfella’s pizza today announced plans to merge with the biggest sandwich maker in the UK.

Irish chilled foods firm Greencore hopes to complete the tie-up with Leeds-based Northern Foods by the end of June. The move will create a new firm called Essenta with combined annual sales of €2bn.

Bringing the two businesses together is expected save €47m a year in costs, through better buying power, smaller tax bills and cost cutting.

Greencore has around 7,000 staff and 17 manufacturing facilities in ireland, the UK and the US. Northern Foods operates from 24 facilities (18 of which are manufacturing facilities) in the UK and Ireland, directly employing more than 9,000 people.

Greencore said it had seen an increase of 17.6% in group operating profit for the year to September 24.

It its preliminary statement of results, the company said group sales were up by 6.9% to €856m.

Greencore boss Patrick Coveney, who will take over at CEO of Essenta, said: "We have made enormous progress in reshaping our group into a focused, growing convenience food business this year. This is reflected in the strong sales, margin and profit growth in the results of our continuing business announced today."