Associated British Foods (ABF), the owner of Kingsmill, Ryvita, and Twinings, is set to acquire the historic Hovis Group, merging it with its own bakery arm.
The multinational confirmed on Friday that an agreement has been reached to buy Hovis from private equity owner Endless. The deal will "combine" the production and distribution activities of Hovis with ABF’s Allied Bakeries business, which produces Kingsmill and Allinson’s bread.
This strategic move is expected to yield "significant costs synergies and efficiencies", aiming to create a sustainably profitable bread business. Hovis, founded in 1890, was previously bought by Endless in 2020 from Premier Foods, owner of the Mr Kipling brand.
It comes three months after ABF first confirmed talks over a potential deal.
The move follows a strategic review of the Allied Bakeries business, which has been loss-making in recent years due to cost pressures and changing consumer demand.
ABF said: “The combined business will be better placed to compete effectively and to establish a stable platform for product innovation in the segments of the UK bakery category that are growing as a result of changing consumer tastes and needs.”
The food firm also said the deal would lead to the expansion of new product range and improvements in current products.
George Weston, chief executive of ABF, said: “This transaction will create a UK bakeries business that is both profitable and sustainable over the long term.
“Supporting the Hovis and Kingsmill brands with well-invested and efficient operations will also enable innovation and growth.
“This solution will create value for shareholders, provide greater choice for consumers and increase efficiencies for customers.”
The deal is subject to regulatory approval and is likely attract the attention of the Competition and Markets Authority (CMA), combining two of the larger bread makers in the country behind the market leader, Warburtons.
