Associated British Foods plc (“ABF” or “the Group”) today announces that it has completed its acquisition of Hovis Group Limited (“Hovis Group”) from Endless LLP.
The acquisition of Hovis Group and its combination with Allied Bakeries, the UK bakery business of ABF, will create a sustainably profitable UK bakeries business for the long term with an enhanced market position.
The integration of the two businesses will commence shortly and is expected to deliver substantial operational synergies and efficiencies across production and distribution. These benefits will drive improved profitability, strengthen the resilience of the combined business and enable investment in brands and product innovation. The restructuring activity to realise these benefits will require upfront costs and will be executed efficiently and with care.
We expect the acquisition to be marginally dilutive to ABF’s earnings in financial year 2027 as these actions are undertaken, with the transaction becoming accretive thereafter.
From today, Allied Bakeries and Hovis Group will operate as Hovis Bakeries, under the brand line ‘Nourishing the Nation’. The business 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.
George Weston, chief executive of Associated British Foods, said: “The completion of this transaction is a significant step towards the delivery of a 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. 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.”
Sarah Arrowsmith, chief executive of Hovis Bakeries, said: “This is an exciting opportunity to create a large and transformative UK bakery business. 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.”
