CMA probe continues into bread business ‘merger’
The Competition and Markets Authority is continuing its probe into the proposed acquisition of Hovis, owned by Endless LLP, by Associated British Foods, owner of Allied Bakeries.
The first step of the CMA’s information-gathering process – an invitation to comment time period – concluded in early October, with one of the next stages being the launch its formal investigation into the transaction.
Having confirmed earlier this year they were in discussions regarding a potential transaction, it was announced during the summer that Hovis Group would be bought over by ABF.
As stated in their Interim Results Announcement back in April, Allied Bakeries faced what it called a “very challenging market”.
“We are evaluating strategic options for Allied Bakeries against this backdrop and we remain committed to increasing long-term shareholder value,” said a statement.
Subject to regulatory review by the CMA, the proposed acquisition has been hailed as a “significant step towards creating a more sustainable and efficient bakery operation in the UK”.
In a statement, ABF said the acquisition would combine the production and distribution activities of the two businesses, driving significant costs synergies and efficiencies, to create a profitable UK bread business that is sustainable over the long-term.
