Company Announcement

Bakkavör Group Acquires Remaining Shares of Fresh Cook Limited

Bakkavör Group (ICEX: BAKK) has reached an agreement to acquire the remaining 50% of the issued share capital of Fresh Cook Ltd., a manufacturer of 'ready to cook' meals, which Bakkavör Group and Rannoch Foods have operated as a 50:50 joint venture business since October 2004.

The consideration price, which remains confidential, will be financed through the Group's own cash resources. Fresh Cook will be consolidated into the Group from the acquisition date, but the acquisition will not have a material effect on the Group's financial results during this financial year.

Fresh Cook, which is based in Lincolnshire in the UK and employs 360 people, focuses on producing ready to cook meals for Marks & Spencer. Ready to cook meals are essentially ready meals with the key difference that many of the ingredients are still raw and the meal therefore has to be cooked rather than just reheated. Today, ready to cook meals are one of the key drivers of the total ready meals market with 6% growth in the first nine months of the year. Following the acquisition, Bakkavör Group estimates that it will hold an 11% share of this market.

Ágúst Gudmundsson CEO, said:

"This is a strategic acquisition for us as the ready to cook market offers solid growth opportunities going forward as a result of increased consumer demand for fresh foods made with high quality natural ingredients. We are already a leader in the key categories we operate in and we are pleased to further strengthen our position in this fast growing area."

Further Information:

Ágúst Gudmundsson, CEO
Tel: +44 (0)20 7266 6400

Hildur Árnadóttir, CFO
Tel: +354 858 9706

Bakkavör Group is a leading international food manufacturing company specialising in fresh prepared foods and produce. The Group operates 46 factories and employs over 16,000 people in seven countries with a pro-forma turnover in 2005 of over £1 billion. The Group's Head Office is in Reykjavík, Iceland, and the business is listed on the Iceland Stock Exchange (www.icex.is Ticker: BAKK).
Bakkavör Group was founded in 1986 and celebrates its 20th Anniversary this year. During this time, the business has grown significantly and today Bakkavör Group is the largest provider of fresh prepared foods and produce in the UK.

The Group's vision is to be recognised and respected as the world's leading fresh prepared foods and produce provider. Bakkavör Group has attained leading market positions in its key market areas of ready meals, pizzas, convenience salads and leafy salads. In total, the Group makes over 4,700 products in 17 product categories, which are developed and sold predominantly under its customers' own brands. In addition to the UK and Iceland, the Group also has business operations in France, Belgium, Spain, South Africa and China and is well-positioned for further expansion.


To subscribe to Bakkavör Group's mailing list, please log onto:
www.bakkavor.com/subscribe

https://newsclient.omxgroup.com/cdsPublic/viewDisclosure.action?disclosureId=209725&messageId=228485