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Hovis to Be Acquired by AB Foods in Major UK Bakery Shake-Up

By  |  August 17, 2025

Associated British Foods (AB Foods) has reached an agreement to purchase Hovis, one of the UK’s most recognized bread makers, strengthening its position in a market where consumer preferences have increasingly shifted away from traditional sliced loaves. The move adds Hovis to AB Foods’ Allied Bakeries division, which already includes Kingsmill, Sunblest, and Allinson’s, according to Reuters.

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    The 135-year-old Hovis brand is being sold by private equity group Endless. While AB Foods did not disclose the financial terms, a person familiar with the matter told Reuters the deal is valued at roughly £75 million ($102 million). The acquisition is expected to bolster Allied Bakeries, which, like Hovis, has faced declining demand for pre-packaged bread amid competition from artisanal and specialty producers.

    AB Foods had flagged in April that it was reviewing strategic options for Allied Bakeries, acknowledging that the business faced a “very challenging market.” By May, the company confirmed it was in discussions with Endless over a possible acquisition, per Reuters.

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    The tie-up is set to bring operational efficiencies, with AB Foods stating that combining production and distribution will help cut costs and enhance innovation. The company pointed to opportunities in faster-growing categories such as sourdough. “This transaction will create a UK bakeries business that is both profitable and sustainable over the long term,” Chief Executive George Weston said.

    However, the deal is subject to regulatory approval and could face extensive scrutiny from the Competition and Markets Authority. Hovis holds an estimated 18% share of the packaged sliced bread market, while Allied Bakeries controls around 6%. Warburtons leads the sector at approximately 28%. Analysts at Panmure Gordon noted that although the merger may attract close examination, regulators could ultimately allow it to proceed, given the fragile financial state of the companies involved.

    Beyond its bakery division, AB Foods operates a wide-ranging portfolio that includes Twinings tea, Jordans cereals, Ovaltine, and the budget fashion retailer Primark. While the group recently reported a 10% drop in first-half profits, primarily due to challenges in its sugar division, its shares have risen 11% so far this year.

    Source: Reuters