The London Bread and Cake Company in Edmonton and European Bakeries in Surrey Quays make specialist products for retailers, other manufacturers and caterers.
Joanne Dalton, product manager for European Bakeries, said: “Some customers were using us against each other in a price war. So we decided to get together rather than suffer separately.”
The businesses will unite sales forces and transport fleets. The 36-vehicle fleet currently operates from both sites, but there are plans to form a third company in March 2005 to handle distribution.
Both companies are inviting other speciality bakers to contact them with a view to supplying a wider range of products to their customers.
Combined sales for the two businesses are £8.6m. They make a total of 400 products, but plan to cut that to focus on bestselling lines.
Dalton said: “We will decide on a business strategy in the next two months. We have a name in mind for the new company and we will look at branding in March.”