LONDON (Reuters) -Associated British Foods has agreed to buy bread brand Hovis from private equity firm Endless, bolstering the group’s loss-making Allied Bakeries unit which owns the Kingsmill, Sunblest and Allinson’s brands, it said on Friday.
AB Foods said in April it was “evaluating strategic options” for Allied Bakeries, saying it continued to face a “very challenging market”. The group said in May it was in talks with Endless about a potential deal.
The purchase price was not disclosed.
“This transaction will create a UK bakeries business that is both profitable and sustainable over the long term,” AB Foods CEO 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.
However, regulator the Competition and Markets Authority is under pressure from the UK government to support growth.
(Reporting by James Davey in London and Yamini Kalia in Bengaluru; editing by William James)
