15th Aug 2025 08:46
(Alliance News) - Associated British Foods PLC on Friday said it will combine Hovis Group Ltd with its existing Allied Bakeries division to create a "profitable UK bread business that is sustainable over the long term."
On Friday, AB Foods confirmed it has bought Hovis Group from Leeds-based private equity company, Endless LLP, after disclosing back in May that talks were taking place over a possible deal.
London-based AB Foods is a food processing and retailing company, which owns a diverse range of businesses, including Primark.
In May, AB Foods said it was evaluating a range of strategic options for Allied Bakeries, its UK bakery business, noting profitability has been "increasingly challenged" in recent years by a decline in demand for pre-sliced, packaged bread.
Allied Bakeries owns the bread brands Kingsmill, Allinson's and Sunblest. It also produces own-label bakery ranges for major UK supermarkets.
On Friday, AB Foods said the acquisition of Hovis will combine the production and distribution activities of the two businesses, "driving significant costs synergies and efficiencies, to create a profitable UK bread business that is sustainable over the long term."
The combined business will be "better placed" to compete "effectively" and target segments of the UK bakery category that are growing as a result of changing consumer tastes and needs.
This will include improvement in existing products and expansion into new product ranges, AB Foods said.
"Supporting the Hovis and Kingsmill brands with well-invested and efficient operations will also enable innovation and growth," said AB Foods Chief Executive George Weston.
No financial details were disclosed, and completion of the deal is subject to regulatory approval.
Endless bought Buckinghamshire, England-based Hovis Group in 2020 for an undisclosed price.
According to Companies House data, pretax loss at Hovis Group widened to GBP4.7 million in the 52 weeks to September 28, 2024 from GBP3.6 million a year prior, as finance expenses rose to GBP7.6 million from GBP6.8 million. Revenue decreased 8.6% to GBP446.8 million from GBP489.0 million.
Shares in AB Foods were up 0.1% to 2,276.00 pence each on Friday morning in London. The wider FTSE 100 index was up 0.1%.
By Jeremy Cutler, Alliance News reporter
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