Britain’s biggest bread brand is on the brink of being created after Kingsmill’s owner agreed to buy rival Hovis Group.
If Britain’s competition watchdog gives the deal the green light, future job cuts could be on the cards, though no details have been announced.
The deal would mean Britain’s second and third largest bread brands would be merged.
Associated British Foods has agreed to buy Hovis from private equity group Endless in a deal thought to be worth around £70million.
The deal came after ABF, which owns Primark, launched a review of its strategic options for its Allied Bakeries arm.
On Friday, ABF said the deal would result in the merging of the production and distribution operations of the two bakery businesses. The aim of this merging of operations is to cut costs and boost efficiencies, ABF said.
Big bread brand: Britain’s biggest bread brand is on the brink of being created after Kingsmill’s owner agreed to buy rival Hovis Group
‘This transaction will create a UK bakeries business that is both profitable and sustainable over the long term,’ ABF chief executive George Weston said.
The deal is subject to regulatory approval. It will be scrutinised by the competition authorities given the combined bread market share of Allied Bakeries and Hovis.
But the Competition and Markets Authority is under pressure from the government to help support growth.
It comes three months after ABF first confirmed talks over a potential deal.
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