On August 15, 2025, the British food giant Associated British Foods (ABF) announced a landmark agreement to acquire Hovis, one of the UK’s most iconic bread brands, in a move that could reshape the country’s bakery landscape for years to come. The deal, estimated at around £75 million according to sources cited by Reuters and New Food Magazine, will see Hovis merged with ABF’s Allied Bakeries unit, the maker of Kingsmill, Allinson’s, and Sunblest breads. This combination is poised to create the UK’s largest breadmaker, uniting two brands that together account for roughly 40% of the pre-sliced, packaged bread market.
The acquisition, struck with private equity firm Endless LLP—Hovis’s owner since 2020—comes at a pivotal moment for the UK bakery sector. Both Allied Bakeries and Hovis have faced financial headwinds in recent years, battered by shifting consumer preferences, the rising popularity of low-carb diets, and increased competition from specialty bread producers and supermarket own-label brands. Allied Bakeries, in particular, has been loss-making, with ABF admitting to investors that “profitability at Allied Bakeries has been increasingly challenged.”
Hovis, founded in 1890 (and producing bread since 1886, according to Bloomberg), is a household name in Britain, but even such a storied brand has not been immune to the long-term decline of the sliced loaf market. Endless acquired Hovis from Premier Foods and Gores Group in November 2020, aiming to revitalize the brand amid a highly competitive and changing marketplace. Now, with ABF’s backing, both Hovis and Kingsmill are set for a new chapter.
Under the agreement, the production and distribution activities of Hovis and Allied Bakeries will be integrated, a move that ABF says will deliver “significant cost synergies and efficiencies.” The company believes that this streamlined operation will not only restore profitability but also create a “sustainably profitable bread business” capable of weathering further changes in consumer demand. ABF’s chief executive, George Weston, was upbeat about the prospects, telling New Food Magazine, “This transaction will create a UK bakeries 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.”
The deal is not without its hurdles. It is subject to regulatory approval and is expected to attract close scrutiny from the UK’s Competition and Markets Authority (CMA), as it combines the country’s second- and third-largest bread brands. Warburtons, the current market leader, holds about 28% of the pre-sliced packaged bread market, while Hovis and Allied Bakeries control around 18% and 6% respectively, according to Reuters. The combined group’s 40% share does not include bread made for own-label customers, which could further boost its market presence.
The CMA’s review could take up to a year, and industry analysts have noted that approval is not a foregone conclusion. However, as Panmure Gordon analysts pointed out to Reuters, “Precedents in similar industries do suggest an approval is possible as one company’s survival is at risk.” The regulator is also under pressure from the UK government to support growth and innovation in the food sector, which may influence the outcome.
ABF’s ambitions go beyond simply cutting costs. The company has been candid about the need for product innovation and adaptation in the face of declining demand for traditional packaged loaves. “The combined business will be better placed to compete effectively and to establish a stable platform for product innovation in the segments of the UK bakery category that are growing as a result of changing consumer tastes and needs,” ABF told investors. Areas such as sourdough and other specialty breads are expected to be a focus, as the new group seeks to capture growth in segments where consumer appetites remain strong.
For Hovis, this deal marks the latest twist in a long and eventful history. The brand, which traces its roots back to the late 19th century, has weathered wars, rationing, and the rise of supermarket giants. Endless LLP, Hovis’s outgoing owner, expressed pride in their stewardship of the brand. Aidan Robson, Managing Partner of Endless LLP, said via New Food Magazine: “We are proud of the journey we’ve shared with Hovis to date, supporting this historic brand in a highly competitive and challenging market. The transaction with ABF represents an opportunity to create a platform for long-term sustainability in the bakery sector for the benefit of retailers and consumers. While we work towards achieving CMA clearance of the transaction, our focus remains on Hovis to continue delivering exceptional products and service to its customers.”
This acquisition also comes at a time of broader change for ABF. The conglomerate, which owns other major grocery brands such as Twinings tea, Jordans cereals, and Ovaltine, as well as the Primark fashion chain, reported a 10% fall in first-half profit in April 2025, mainly due to weak performance in its sugar division. Despite these challenges, ABF shares have risen by 11% so far this year, reflecting investor confidence in the group’s diversified portfolio and its ability to adapt.
Looking ahead, the integration of Hovis and Allied Bakeries will not be without its challenges. The UK bread market remains fiercely competitive, with supermarket own-label products and smaller artisan bakeries nipping at the heels of the big brands. Changing dietary trends—such as the shift toward gluten-free, high-protein, or low-carb options—mean that even the most established names cannot afford to stand still. ABF’s stated commitment to innovation and quality will be put to the test as it seeks to win over a new generation of consumers.
At the same time, the deal’s implications for competition, pricing, and consumer choice will be closely watched by regulators, retailers, and the public alike. The CMA’s decision will be a key moment, not just for ABF and Hovis, but for the future shape of the UK’s food industry. If approved, the merger could see the rebirth of two great British brands—stronger together, but facing a market that is more fragmented and fast-changing than ever before.
For now, all eyes are on the CMA and the months of scrutiny that lie ahead. But whatever the outcome, one thing is clear: the story of British bread is far from over, and this latest chapter promises to be one of its most consequential yet.
