ABF explores merger of Kingsmill, Hovis amid market challenges

Associated British Foods (ABF), owner of Kingsmill, has confirmed talks with Hovis's private equity owner Endless about a potential merger of their bread businesses amid difficult market conditions for the UK bakery sector. Both companies have faced declining sales and operating losses due to rising costs, consumer shifts toward low-carb diets, and skepticism about processed foods. Industry analysts suggest a merger could help restore profitability by unlocking operational efficiencies and ensuring long-term viability, though it would likely attract scrutiny from the Competition and Markets Authority given their combined market share. Warburtons remains the market leader, while Hovis and Kingsmill trail with significant but smaller shares. ABF emphasized it is exploring all strategic options for Allied Bakeries, and there is no certainty a transaction will occur. The industry overall is contracting, prompting calls for consolidation to maintain competitiveness and sustainability.