Hovis and Kingsmill in Major Merger Talks to Combine Bakeries
Deal News | May 06, 2025 | EIN
In a strategic effort to survive in a declining market, Associated British Foods (ABF), the owner of Kingsmill, has entered into merger discussions with Hovis, a bakery brand owned by Endless LLP. This potential merger comes in the wake of a challenging decade for bakeries as health trends sway consumers away from bread, significantly affecting traditional sales. Despite Allied Bakeries' substantial annual sales, the firm faces losses amid fierce competition and price-sensitive markets. Analysts suggest that a merger could boost competitive standing against rival, Warburtons. Meanwhile, the deal is likely to undergo scrutiny from the Competition and Markets Authority. Alongside this report, Deliveroo has announced its acquisition by Doordash for £2.9 billion, marking a significant decrease from its initial public offering valuation.
Sectors
- Food & Beverage
- Retail and Consumer Goods
- Financial Services
Geography
- United Kingdom – The UK is relevant as both targeted companies, Kingsmill and Hovis, operate within this country.
- United States – The US is relevant due to the acquisition of Deliveroo by Doordash, a major American company.
Industry
- Food & Beverage – This sector is relevant as the article discusses two major bakery brands, Kingsmill and Hovis, looking to merge.
- Retail and Consumer Goods – This classification is pertinent given the focus on consumer trends affecting bread consumption in the UK market.
- Financial Services – This sector is involved due to the mention of M&A activities and financial performance of the companies.
Financials
- £400 million – The annual sales figure for Allied Bakeries, a division of ABF.
- £478 million – The annual revenue reported by Hovis.
- £34.3 million profit on £711 million of sales – Warburtons' financial performance in the same sector.
- £2.9 billion – The acquisition price Doordash paid for Deliveroo.
- £185 million – The amount Will Shu, founder of Deliveroo, could make from cashing in his shares during the takeover.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Associated British Foods (ABF) | Potential Acquirer | Company | ABF is the owner of Kingsmill and is in talks to merge with Hovis. |
| Hovis | Target Company | Company | Hovis is a well-known bakery brand in the UK and the potential target for merger. |
| Endless LLP | Vendor | Company | Endless LLP is the current owner of Hovis. |
| Warburtons | Competitor | Company | Warburtons is identified as the market leader in the bakery sector. |
| Deliveroo | Acquired Company | Company | Deliveroo is a food delivery company recently acquired by Doordash. |
| Doordash | Acquirer | Company | Doordash is an American food delivery service that acquired Deliveroo. |