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You can find the current article at its original source at https://www.theguardian.com/business/2025/aug/15/kingsmill-owner-agrees-to-buy-hovis-in-deal-to-create-uk-biggest-bread-brand
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| Kingsmill owner to buy Hovis in £75m deal to create UK’s biggest bread brand | Kingsmill owner to buy Hovis in £75m deal to create UK’s biggest bread brand |
| (about 3 hours later) | |
| Jobs expected to go if competition watchdog approves takeover by Associated British Foods | Jobs expected to go if competition watchdog approves takeover by Associated British Foods |
| Business live – latest updates | Business live – latest updates |
| The owner of Kingsmill has agreed to buy its rival Hovis in a deal worth an estimated £75m that could create the UK’s biggest bread brand if the competition regulator approves it, but also put jobs at risk. | The owner of Kingsmill has agreed to buy its rival Hovis in a deal worth an estimated £75m that could create the UK’s biggest bread brand if the competition regulator approves it, but also put jobs at risk. |
| The deal comes after decades of decline in the popularity of the packaged sliced loaf, with Hovis, owned by the private equity company Endless, and its rival Kingsmill – part of Associated British Foods (ABF) – struggling to get out of the red for some years. | The deal comes after decades of decline in the popularity of the packaged sliced loaf, with Hovis, owned by the private equity company Endless, and its rival Kingsmill – part of Associated British Foods (ABF) – struggling to get out of the red for some years. |
| ABF, which also owns the Primark clothing chain, said the tie-up would combine the production and distribution activities of the two businesses, which is expected to lead to roles being shed. It is understood that bringing together these facilities could save £55m. | ABF, which also owns the Primark clothing chain, said the tie-up would combine the production and distribution activities of the two businesses, which is expected to lead to roles being shed. It is understood that bringing together these facilities could save £55m. |
| Sharon Graham, the general secretary of the Unite union, which represents hundreds of workers at both businesses, said: “While there is still a long way to go before any buyout happens, Hovis and Kingsmill must ensure that jobs are protected. Unite represents workers at both companies and we will not tolerate attacks on jobs, pay or conditions.” | |
| The potential merger between the UK’s second and third largest bread brands will attract scrutiny from the competition watchdog, which it is understood could take a year. The Competition and Markets Authority will have to decide if the brands face sufficient rivalry on price and quality from supermarket own labels and other options as well as the UK’s current market leader, Warburtons, which accounts for more than a quarter of packaged sliced bread sales. | |
| The Hovis directors said in accounts recently published at Companies House that they thought any deal was “unlikely to be concluded” before September next year and that scrutiny was likely to continue until at least then. | The Hovis directors said in accounts recently published at Companies House that they thought any deal was “unlikely to be concluded” before September next year and that scrutiny was likely to continue until at least then. |
| Sales at Hovis, which employs 2,925 people, fell almost 9% to £447m in the year to 28 September 2024 as pre-tax losses widened to £4.7m from a loss of £3.6m a year before after £530,000 in one-off costs, the majority of which related to restructuring. | Sales at Hovis, which employs 2,925 people, fell almost 9% to £447m in the year to 28 September 2024 as pre-tax losses widened to £4.7m from a loss of £3.6m a year before after £530,000 in one-off costs, the majority of which related to restructuring. |
| It said it had been battling “extreme price volatility across key raw materials” during the year. | It said it had been battling “extreme price volatility across key raw materials” during the year. |
| Meanwhile, ABF’s bakery division, Allied Bakeries – which includes Kingsmill, Allinson’s and Sunblest – incurs annual losses of about £30m despite sales of about £400m, according to analysts at Panmure Liberum. | Meanwhile, ABF’s bakery division, Allied Bakeries – which includes Kingsmill, Allinson’s and Sunblest – incurs annual losses of about £30m despite sales of about £400m, according to analysts at Panmure Liberum. |
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| Both businesses are facing strong competition from the family-owned Warburtons, now the UK’s biggest bread brand, which has gained a bigger slice of the market through innovation – from giant crumpets to seeded flatbreads. It is understood to account for more than a quarter of packaged bread sold. | Both businesses are facing strong competition from the family-owned Warburtons, now the UK’s biggest bread brand, which has gained a bigger slice of the market through innovation – from giant crumpets to seeded flatbreads. It is understood to account for more than a quarter of packaged bread sold. |
| Supermarkets’ own labels account for more than 40% of traditional wrapped sliced bread sales and Warburtons for just over a quarter at present, with the other two players together accounting for a similar amount. If other “morning goods” such as rolls, bagels and croissants, and different types of bread, are taken into account, the figures change again. |