Kingsmill owner Allied Bakeries’ takeover of Hovis has received final approval from the Competition and Markets Authority.
The markets watchdog’s final judgement found that Allied Bakeries would have had to close down if the merger fell through – meaning competition would be lessened with or without the deal.
Both companies supply bread and bakery goods under their brands – Hovis and Kingsmill – and as own-label products across the UK.
Evidence gathered in the investigation showed that Allied Bakeries and Hovis had both faced significant financial challenges, with AB making “significant” losses over the past 14 years. Some analysts have estimated accumulated losses to its owner ABF of as much as £750m, despite concerted cost-cutting efforts.
Hovis’ private equity owner Endless, meanwhile, bought Hovis in 2020 for a reported £75m. Since then, the baker has made a loss most years, with its latest accounts to 28 September 2024 showing pre-tax losses increasing to £4.7m.
A decline in demand for plant bread, a shift towards lower-margin private-label products and substantial increases in costs including energy, wheat and distribution all contributed to the companies’ difficulties.
The judgement followed 10 months of inquiry by the CMA into the deal, latterly by an independent panel on behalf of the watchdog.
“Bread is a basic staple for millions of people, which is why it is important we looked carefully at this deal and assessed the competition implications for households across the UK,” said chair of the independent inquiry group, Cyrus Mehta.
“On the basis of the wide range of evidence we received, which showed the difficult position many UK-based bakeries are in, we found Allied Bakeries – owned by ABF – would likely leave the market entirely if the deal did not proceed. Taking that into account, we have concluded the deal does not raise competition concerns.”
When he announced the deal in August 2025, ABF CEO George Weston said the merger would create a profitable and sustainable company that could “create value for shareholders, provide greater choice for consumers and increase efficiencies for [supermarket] customers.”
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