[ad_1]
The owners of Hovis and Kingsmill are closing in on a definitive agreement to merge two of Britain’s most famous grocery brands following months of talks.
Sky News has learnt that Associated British Foods (ABF), the London-listed company which owns Kingsmill’s immediate parent, Allied Bakeries, has proposed paying roughly £75m to acquire Hovis from its long-term private equity backers.
Banking sources said that a deal could be formally agreed to combine the businesses as early as the end of next week, although they cautioned that the complexity of the transaction meant that the timing could yet slip.
Confirmation of a tie-up would come nearly three months after Sky News revealed that ABF and Endless – Hovis’s owner since 2020 – were in discussions.
Industry sources have estimated that a combined group could benefit from up to £50m of annual cost savings from a merger.
ABF has also been exploring options for the future of Allied Bakeries separate from its talks with Hovis in the event that a deal could not be agreed or is prevented from completing by competition regulators.
If it does go ahead, the merger will unite two historic bread producers under common ownership, with Allied Bakeries having been founded in 1935 by Willard Garfield Weston, part of the family which continues to control ABF.
Hovis traces its history back even further, having been created in 1890 when Herbert Grime scooped a £25 prize for coming up with the name Hovis, which was derived from the Latin ‘Hominis Vis’ – meaning “strength of man”.
Persistent inflation, competition from speciality bread producers and shifting consumer habits towards lower-carb diets have combined to impair breadmakers’ financial health in recent decades, however.
In accounts filed at Companies House earlier this month, Hovis said it had “achieved positive financial progress despite continued tough trading conditions”.
The company reported sales of £439.6m in the 52 weeks to 28 September last year,…
[ad_2]
