Bakkavor continues Icelandic corporate invasion

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Iceland's corporate invasion of the UK continued apace at the weekend as Bakkavor, the owner of Geest, cemented its position as Britain's largest chilled foods maker with two acquisitions.

Yesterday Bakkavor announced the purchase of Laurens Patisseries, a manufacturer of chilled desserts, for £130m. On Friday it bought a chilled-bread maker for an undisclosed sum.

It is the first major transaction since FL Group, the owner of Icelandair, sold its stake in easyJet, triggering speculation of a wholesale liquidation of Icelandic investments in the UK. The rumours were compounded by a 10 per cent fall in the Icelandic krona, a hike in interest rates to 11.5 per cent and a series of negative reports on Icelandic banks by credit ratings agency.

Agust Gudmundsson, Bakkavor's executive chairman, said the deal showed the company's commitment to the UK, where it makes 93 per cent of its sales. "The acquisition [of Laurens] is a good example of our intention to continue to strengthen our market position in our chosen areas within the fresh prepared foods markets," he said. "The market continues to grow ahead of the general food market and we will continue to focus on business opportunities in this area."

Bakkavor, which is listed on the Iceland stock exchange, is taking out a £155m sterling loan to fund £100m of the Laurens deal and to pay off a £43m bridging loan it took out to buy Hitchen Foods last October. Its biggest acquisition in the UK was its £623m purchase of Geest, the chilled foods giant, in May last year.