According to Sky News, Associated British Foods (which owns Kingsmill parent company Allied Bakeries) could agree to buy Hovis from private equity firm Endless LLP “within the next week”.
Sources told the news outlet that while a formal merging of the brands is close, the “complexity” of the deal means that a timeline is not yet set in stone.
In May, a spokesperson for Associated British Foods confirmed in a statement that the group was in talks with Endless LLP about a possible deal, but did not provide any details about the structure of any transaction.
The firm also pointed to the challenging conditions within the bakery sector.
“We are evaluating strategic options for Allied Bakeries against this backdrop and we remain committed to increasing long-term shareholder value,” the spokesperson added.
Endless acquired Hovis from Gores Group and Premier Foods in November 2020.
In a statement released alongside Hovis’ 2024 results, the brand’s directors noted that talks were being held.
“At the present time these discussions are ongoing, no formal Sale and Purchase agreement has been signed and the completion of any transaction is expected to be subject to UK regulatory processes,” the statement said.
Asked about the impact of a possible merger on workers, Sarah Woolley, general secretary of the Bakers Food and Allied Workers Union (BFAWU), said that it was disappointing for leaks to occur before information has been briefed to employees.
“We continue to be open to conversations and look forward to getting the whole picture once an agreement is finalised so that we can look at next steps to protect our members in both companies going forwards,” Woolley added.
On the wider implications of the deal, CEO of the food-focused Prof Consulting Group, Mark Field, told Food Manufacture: “The latest speculation on the acquisition that would bring two of the UK most recognisable and trusted bread brands (Hovis and Kingsmill) together is in my view a strong strategic move.
“In addition to the clear benefits in market share growth, with the two businesses so closely aligned I would expect there to be significant efficiencies from procurement and packaging through to operations, range rationalisation and sales that would be unlocked initially, critical to drive long term competitiveness and further market share gains.”
