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UK fresh food producer, Bakkavor, has agreed to sell its China business to Lihe Xing (Qingdao) Food Technology Company, part of Lihoo’s Food Industry group, in a £50m deal.

The Chinese arm of Bakkavor’s business manufactures fresh, prepared food for foodservice and retail customers. It provides salads, sandwiches and meals from seven sites across the country. With around 2,300 employees, it generated £105 million in 2024.

The sale forms part of a plan to simplify Bakkavor's operations in China and, once completed at the end of 2025, will see the group’s exit from the region.

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

Proceeds from the sale, which is expected to close in the second half of this year pending regulatory approval, aim to reduce group debt and support Bakkavor’s plan to boost profit margins by 6%.

Edwards continued: “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 focused on delivering the great service our customers are accustomed to whilst we work towards completion.”

The move comes after Bakkavor's takeover bid from rival Greencore, with the deadline for a decision on the potential merger now having been extended to 9 May.