Associated British Foods plc (ABF) reached a highly anticipated agreement to acquire Hovis Group Limited from Endless LLP. The completion of the transaction is subject to regulatory approval. Hovis Group is an integrated bakery business, engaged in the production and distribution of bread and bakery products in the UK.

“ABF has been evaluating a range of strategic options for Allied Bakeries, its UK bakery business. Profitability at Allied Bakeries has been increasingly challenged in recent years by a decline in demand for pre-sliced, packaged bread and a loss of scale in Allied Bakeries’ nationwide distribution network serving the major retailers with daily delivery of bread and bakery goods.

Following this review, ABF announces today that it has reached an agreement to acquire Hovis Group Limited (“Hovis Group”) from Endless LLP,” the announcement said on August 15.

The acquisition will combine the production and distribution activities of the two businesses, creating a sustainable bread business in the UK.

George Weston, Chief Executive of Associated British Foods, said: “This transaction will create a UK bakery 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.”

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Hovis and Kingsmill makers in deal talks

Photo: Hovis