Bakkavor to sell China operations in £50m deal

(Sharecast News) - Food producer Bakkavor said on Tuesday that it has agreed to sell its China operations to Lihe Xing (Qingdao) Food Technology Co for around £50m. Bakkavor's China business manufactures fresh prepared food, supplying foodservice and retail customers nationally with salads, sandwiches and meals from seven manufacturing sites with around 2,300 staff members. In FY24, the business generated revenue of £105m.

"Over the last two years, Bakkavor has made significant progress in simplifying its operations in China and, as part of its previously stated review of its strategic options, this sale completes the group's exit from the region," the company said.

Proceeds from the sale will be used to further reduce group leverage and the exit from China will support the delivery of the group's medium-term margin target of 6%, Bakkavor said.

Chief executive Mike Edwards said: "Over the last 20 years, we have built a great business in China and I would like to thank all our China colleagues for their contribution to the significant progress we have made in recent years.

"With strong foundations in place, we are confident that going forward the business and its stakeholders will benefit from Lihoo's local expertise and experience as a frozen and fresh meal manufacturer.

"We remain focussed on delivering the great service our customers are accustomed to whilst we work towards completion."