Most of the time, Jerry Marwood leaving Spar would be the big story of the day.

But today that honour goes to Northern Foods’ combination with Irish convenience giant Greencore, announced this morning.

The duo reckon they’ll eventually save £40m a year by getting hitched, with the combined company – dubbed Essenta – to be run from Dublin.

Despite a slightly iffy name that sounds a bit like a sanitary towel brand, the tie-up has been well received. Shares in Northern were up almost 25% following the announcement, while Greencore stock also posted a double-digit rise.

Greencore boss Patrick Coveney will be CEO of the new company, inevitably raising questions over the future of his counterpart at Northern, Stefan Barden.

“Essenta Foods presents a compelling opportunity for all stakeholders,” Coveney said today.

“It creates a substantial chilled prepared food company in fast-growing categories in the UK, which is enhanced by strong branded positions in biscuits and frozen food. The investment case is underpinned by tangible cost synergies and the platform for further growth in the UK, Ireland and the US.”

Analysts agree.

“The marriage of the two leading chilled players in the UK market… has been speculated for some years,” says Clive Black of Shore Capital.

“Neither company serves the same product to the same customer. We expect little by way of factory rationalisation, not least because ready meal and sandwich capacities are tight at present and growing at high single-digit rates. Bakery and frozen pizza facilities are distinct to Northern.”

Coveney also insists those “tangible cost synergies” – such an evocative phrase – will not include “material” redundancies.

With the Irish group today reporting a healthy rise in full-year profits, you could argue that Northern needed the deal a lot more than Greencore did.

But Greencore doesn’t see it that way. As one figure close to the deal put it today: “It’s a change for Ireland as all the other news coming out of there right now is shite.”

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