Associated British Foods (LSE:ABF) has completed its acquisition of Hovis Group from private equity firm Endless, combining the target with its own Allied Bakeries business to create a single UK bakery operation trading as Hovis Bakeries.
The enlarged business, operating under the brand line "Nourishing the Nation", will bring together two of the UK's largest bread and bakery brands, with ABF stating the combination is designed to build a sustainably profitable platform with a strengthened market position.
Integration begins immediately, with ABF expecting substantial operational synergies across production and distribution, though the company cautioned that upfront restructuring costs will be required to realise those benefits.
The transaction is expected to be marginally dilutive to ABF's earnings in its 2027 financial year before turning accretive thereafter.
Hovis Bakeries chief executive Sarah Arrowsmith said the combined group would focus on brand innovation, own-label partnerships and its direct-to-store distribution network, describing the deal as "a large and transformative UK bakery business."
The new business intends to direct investment toward growing segments of the UK bakery market, including healthy options, reflecting what ABF describes as shifting consumer tastes.
