Premier Foods is buying rival RHM for £1.2bn, making it the largest food producer in the UK.
The deal brings together Premier brands such as Oxo stock cubes and Batchelor’s soups with the likes of Hovis bread, Bisto gravy and Mr Kipling cakes from RHM.
The combined company will have sales of £2.6bn, 93% of which will be in the UK. The top ten brands in the portfolio will make up around £1.1bn of the total.
Details of the friendly takeover have been released in a stock exchange statement this morning.
Premier says it plans to push forward with innovation and brand investment to take advantage of growth opportunities. It also wants to develop more strategic partnerships with the major UK food retailers.
There are planned cost savings of around £85m from the takeover. However, it is not clear how this may affect the marketing teams of either company at this stage.
Most of RHM’s operations will be integrated into Premier’s existing divisions. Its Culinary Brands, Cake and Customer Partnerships divisions will be brought into Premier’s Grocery operations. However, its Bread Bakeries division will continue as a standalone division.
Premier will control 59% of the enlarged company. The deal is expected to be completed in March next year.