Associated British Foods confirms possible merger between Allied Bakeries, Endless
This move could bring together two of the UK’s most recognized packaged bread brands, Kingsmill and Hovis, under the same ownership.
UK – Associated British Foods (ABF) has confirmed that it is in discussions with private equity firm Endless, the owner of the Hovis bread brand, regarding a potential merger involving ABF’s Allied Bakeries business.
ABF’s confirmation follows ongoing speculation about the future of Allied Bakeries, which has faced increasing commercial pressures in recent years, prompting the company to explore strategic options for the business.
A merger with Hovis, which Endless acquired from Premier Foods and Gores Group in 2020, would represent a significant consolidation in the UK bakery sector.
ABF has acknowledged the challenges in the bakery industry, citing evolving consumer preferences, rising input costs, and intensified competition.
The UK packaged bread market has been affected by a growing interest in lower-carb diets, wellness trends, and a shift towards artisanal and sourdough-style alternatives.
“Associated British Foods notes recent media speculation and confirms that it is in discussions with Endless LLP regarding a potential transaction. However, there is no certainty that a transaction will be concluded, nor regarding the terms of such a transaction,” ABF said
If the merger goes ahead, it could create a new market leader in the packaged bread category, potentially surpassing the category giant Warburtons, a private family-owned firm established in 1876.
Hovis was founded in Macclesfield in 1886, while Allied Bakeries was formed in 1935 and is still partially owned by its founding family. Allied Bakeries launched Kingsmill as its flagship bread brand.
“Allied Bakeries continues to face a very challenging market. We are evaluating strategic options against this backdrop and remain committed to increasing long-term shareholder value. A further announcement will be made as and when appropriate,” ABF stated.
Any consolidation between Allied Bakeries and Hovis could have broad implications for the supermarket bakery sector and is likely to face scrutiny from the UK’s competition watchdog, as it would create a new leader in the market.
Associated British Foods plc (ABF) is a British multinational food processing and retailing company headquartered in London, England.
Its ingredients division is the world’s second-largest producer of both sugar and baker’s yeast and a major producer of other ingredients, including emulsifiers, enzymes, and lactose.
Founded in 1886, Hovis is one of the UK’s most iconic food brands. The company manufactures both branded and private-label bread and bakery products for all of the UK’s major grocery retailers and local convenience stores.
Endless acquired Hovis from Gores Group and Premier Foods plc in November 2020. Headquartered in High Wycombe, the company employs approximately 3,000 people and operates a flour mill, eight bakeries, and a distribution network that spans the UK and Northern Ireland.
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