A merger of the UK’s second and third-biggest bread brands could soon be a reality, after Associated British Foods, owner of Kingsmill maker Allied Bakeries, confirmed “transaction” talks with Hovis owner Endless LLP.
The mooted deal “could be structured as an acquisition of Hovis by ABF, according to analysts, although details about the mechanics of a merger or the valuations attached to the two businesses were unclear”, Sky News reported at the weekend.
“ABF is also said to be exploring other options for the future of Allied Bakeries which do not include a deal with Hovis,” it added.
In response to media reports, ABF today (6 May) confirmed it was “in discussions with Endless LLP” regarding a potential transaction. “However, there is no certainty a transaction will be concluded nor as to the terms of such a transaction.”
The company’s statement continued: “As stated in our interim results announcement on 29 April 2025, Allied Bakeries continues to face a very challenging market. We are evaluating strategic options for Allied Bakeries against this backdrop, and we remain committed to increasing long-term shareholder value. A further announcement will be made as and when appropriate.”
A Hovis spokesperson told The Grocer: “Further to recent news, we are aware that ABF plc has been in discussions with Endless LLP, but we are not able to provide any further detail at this stage.”
A merger of Hovis and Kingsmill would create a bakery brand worth almost £450m in grocery – about £150m less than category leader Warburtons.
Speculation about the deal follows many turbulent years for Hovis and Kingsmill, which in the past year have shed a combined £68.2m in grocery [NIQ 52 w/e 22 February 2025]. Unit sales are down 39.4 million in total – driven in part by distribution losses for Kingsmill, particularly in Tesco.
Last week, ABF reported “lower sales” for Allied Bakeries in the 24 weeks ended 1 March 2025, but did not provide figures.
In its most recently published results – the first to be published under the new management team led by CEO Jon Jenkins – Hovis reported sales jumped £179.2m to £489m in the 53 weeks to 30 September 2023.
In the autumn, Hovis looked set to launch its own take on Kingsmill’s 50/50 loaf, having applied to register the name Hovis White N’ Fibre with the Intellectual Property Office, under class 30 covering bread.
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