Allied Bakeries owner Associated British Foods (ABF) has completed its acquisition of Hovis Group and is merging the two businesses as Hovis Bakeries.
The new name will be in use from today (8 July) and the business will operate under the line ‘Nourishing the Nation’.
ABF said the move will create a “sustainably profitable UK bakeries business for the long term with an enhanced market position”.
Both Allied and Hovis have been struggling for some time, with Allied making significant losses over the past 14 years despite exploring a range of options to improve performance. Sales of the Allied and Hovis bread brands have declined while industry leader Warburtons has continued to grow, and newcomer Jason’s Sourdough has taken a slice of the market.
Integration of the two businesses will start soon, and ABF expects it to bring substantial operational synergies and efficiencies across production and distribution.
The company is looking at these synergies to improve profitability and strengthen the resilience of the combined business. ABF said it will invest in the segments of the UK bakery category that are growing as a result of changing consumer tastes and needs, including healthy options.
“This is an exciting opportunity to create a large and transformative UK bakery business,” said Hovis Bakeries chief executive Sarah Arrowsmith.
“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.”
ABF chief executive George Weston described the completion of the acquisition as a significant step towards delivering of 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,” he stated.
“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.”
The deal was given the green light by the Competition and Markets Authority last month, with the competition watchdog finding the acquisition was not expected to result in a substantial lessening of competition in UK bakery supply.
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