8th Jan 2026 08:39
(Alliance News) - The UK Competition & Markets Authority on Thursday said it has moved its review of the acquisition of Hovis Group Ltd by Associated British Foods PLC to an in-depth phase 2 investigation at the request of the two bread makers.
The CMA launched its phase 1 probe of the merger on December 19 and had until February 19 to reach a decision whether to clear the deal or move to a phase 2 investigation. However, the regulator on Thursday said that AB Foods and Hovis requested a 'fast-track' reference to a phase 2 investigation, and the CMA accepted their request.
The phase 1 probe, in CMA's standard language, was to determine whether or not the merger "may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services".
Back in May, AB Foods, a London-based food processing and clothing retailing business, confirmed talks with Hovis-owner Leeds-based Endless LLP, for a potential acquisition. At the time, AB Foods said it was evaluating strategic options for its Allied Bakeries division, as it continued to face a "very challenging market".
Allied Bakeries owns the bread brands Kingsmill, Allinson's, and Sunblest. It also produces own-label bakery ranges for major UK supermarkets.
In August, AB Foods confirmed it will combine Hovis with Allied Bakeries to create a "profitable UK bread business that is sustainable over the long term". No financial details of the deal were disclosed.
Endless bought Buckinghamshire-based Hovis in 2020 for an undisclosed price.
According to Companies House data, the pretax loss at Hovis widened to GBP4.7 million in the 52 weeks to September 28, 2024 from GBP3.6 million the year before, as finance expenses rose to GBP7.6 million from GBP6.8 million. Revenue decreased 8.6% to GBP446.8 million from GBP489.0 million.
AB Foods shares were down 12% to 1,903.42 pence in London on Thursday morning. The wider FTSE 100 index was down 0.3%.
AB Foods separately on Thursday released a Christmas trading update. It said its fast-fashion retailing division, Primark, had a "challenging start" to its financial year with a "mixed performance". Primark delivered "encouraging" UK sales growth of around 3% in the 16 weeks to January 3, with like-for-like sales growth of 1.7% in a "difficult clothing market", AB Foods said.
By Tom Waite, Alliance News editor
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