Northern Foods, the UK-listed food group, has agreed to sell its speciality bread, chilled pastry, cakes and flour milling businesses to Vision Capital for £160m.

The deal completes the planned sell-off of 40 percent of Northern's businesses, which the company announced in May. Together with the sale of the distribution arm in July, proceeds from the overall disposal programme have exceeded Northern's target of £200m.

Northern will now focus on its major brands such as Goodfella's pizzas in an attempt to improve profit margins. The disposed businesses recorded losses of £37.6m on sales of £477m last year. 

Proceeds from the sale will be used to reduce debt and pension deficits as well as to pay interest.