Associated British Foods has completed its acquisition of Hovis Group, combining it with Allied Bakeries to form Hovis Bakeries as the company targets operational efficiencies, product innovation and long-term growth in the UK bakery sector.
A Landmark Moment in British Baking
Associated British Foods (ABF) has completed its acquisition of Hovis Group Limited from Endless LLP, marking the start of a new combined UK bakery business operating under the Hovis Bakeries name.
The transaction brings together Hovis Group and Allied Bakeries, ABF’s UK bakery business, with the aim of creating a sustainably profitable business with a stronger market position and greater operational scale.
Operational Benefits
Integration of the two businesses will begin shortly, with ABF expecting the combination to deliver operational synergies and efficiencies across production and distribution.
According to the company, these efficiencies are intended to improve profitability, strengthen the resilience of the combined business and support future investment in brands and product innovation.
ABF said restructuring activities required to achieve these benefits will involve upfront costs and will be carried out efficiently and with care.
The company expects the acquisition to be marginally dilutive to earnings during financial year 2027 while integration activities are undertaken, before becoming accretive thereafter.
New Business to Operate as Hovis Bakeries
From completion of the acquisition, Allied Bakeries and Hovis Group will operate as Hovis Bakeries under the brand line, Nourishing the Nation.
The combined business plans to invest in growing segments of the UK bakery category, including healthier product options, in response to changing consumer preferences.
Focus on Manufacturing and Distribution
ABF said the enlarged bakery business will benefit from enhanced production and distribution capabilities as the two operations are integrated.
The company expects the combined manufacturing footprint and distribution network to improve operational performance while supporting future product development and customer service.
George Weston, Chief Executive of Associated British Foods, said:
“The completion of this transaction is a significant step towards the delivery of a profitable UK bread business. By combining our expertise, scale and capabilities with targeted investment into new product categories, this business can return to growth, provide greater consumer choice, serve our customers better than ever and so create value for shareholders. The transaction will support the wider UK economy, including by securing high-quality jobs. I am confident that our uniquely capable team have the right plans to build this business.”
Future Growth Strategy Explained
Sarah Arrowsmith, Chief Executive of Hovis Bakeries, said:
“This is an exciting opportunity to create a large and transformative UK bakery business. We will now begin the work of revitalising our brands through innovation, becoming the UK’s best own-label bakery partner and strengthening our position as the bakery industry’s route to market through our unique direct-to-store network.”
