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Last Updated: Tuesday, 8 March, 2005, 11:54 GMT
Icelandic firm agrees Geest deal
Pizzas are among the Geest ready meals for supermarkets
Geest provides meals and salads to Tesco and Asda
The Icelandic invasion of UK business has continued with convenience food maker Bakkavor agreeing to buy British ready-meals maker Geest.

The deal is worth 485m ($930m) in cash, the companies said on Tuesday.

Bakkavor Invest will pay 655 pence per share to Geest shareholders, who will also receive a special dividend of 7p a share as part of the deal.

Bakkavor executive chairman Agust Gudmundsson said the deal would "open up new opportunities" for the firm.

The Icelandic presence in UK business has increased in recent years following deals by venture capital group Baugur.

Baugur's empire now includes fashion chains Karen Millen and Mk One, and Iceland-owner Big Food Group. It recently had a 1bn bid for supermarket chain Somerfield turned down.

Dips and snacks

The food retailing market has changed dramatically in the last two years
Gareth Voyle, Geest chief executive

Bakkavor operates two subsidiaries in the UK employing approximately 2,500 people.

The core of the operations are food and dips production centres in London and Birmingham which deliver products throughout the UK.

It makes chilled ready-meals, snacks, dips, dressings and sauces.

The takeover offer is worth 10% more than Geest's closing share price on 8 December, when the two parties announced they were in talks.

Price competition

Geest chief executive Gareth Voyle said the board was recommending Bakkavor's offer to shareholders.

"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," he added.

Both Geest and Bakkavor supply meals and salads to Britain's two largest supermarket chains, Tesco and Asda.

Geest was founded in 1935 to develop the sale of flower bulbs.

It diversified into fresh produce in the 1940s and established a commercial banana industry in the 1950s through its shipping subsidiary, Geest Line, which transported bananas from Caribbean. The company sold its banana division in 1996.

Somerfield in 1bn takeover bid
09 Feb 05 |  Business
Baugur: The iceman cometh
09 Feb 05 |  Business
Baugur buys UK's Big Food Group
19 Dec 04 |  Business
Icelandic firm buys fashion chain
11 Nov 04 |  Business
Job boost for fresh food company
27 Oct 04 |  Lincolnshire
Icelandic firm buys Karen Millen
25 Jun 04 |  Business

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