The new combined entity will be called Essenta Foods and it will be listed on the London stock market. Northern Foods disclosed the proposed merger to the City today (Wednesday).
The merged companies have earmarked cost savings of around £40m within 12 months. The deal is expected to be formalised by the second quarter of 2011.
However, the merger is unlikely to have any significant implications on the marketing structure of the two companies, as cost savings are expected to come from reduced overheads, supply chain improvements and tax efficiencies.
Last month, Northern Foods opted to pool all its brands into a single unit headed by marketer Graham Hunter, managing director of its Fox’s brands.
A spokesman for Northern Foods confirmed that at this stage marketing was unlikely to take a big hit in terms of structural changes
Executive changes prompted by the merger include the appointment of Patrick Coveney, chief executive of Greencore, as chief executive of Essenta. Northern Food’s finance director Simon Herrick will take on the same role in the new company, while Anthony Hobson, chairman of Northern Foods, will retain the role in the combined group.
Northern Foods, the maker of Goodfella's Pizza and Fox's biscuits, is to merge with Greencore, one of Ireland's largest sandwich makers.