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Daily Mail
12 hours ago
- Business
- Daily Mail
Report: Hovis and Kingsmill near historic £75M merger
Two of Britain's breadmakers could become one, as Hovis and Kingsmill are nearing a merger agreement. Under the proposed deal, Associated British Foods, which owns Kingsmill's parent company Allied Bakeries, would acquire Hovis for around £75million from Endless, its private equity owners, Sky News reports. The deal could wrap up as soon as the end of next week, according to banking sources with knowledge of the merger. ABF said: 'Allied Bakeries continues to face 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.' The UK bakery market is worth some £5billion, with the equivalent of 11 million loaves being sold each day. However, the market has contracted in recent years on the back of changing diets and higher bread prices. A merger would see the combined group take the largest market share in the wrapped sliced bread sector. Hovis currently holds a 24 per cent market share, while Allied holds 17 per cent.
Daily Mail
14 hours ago
- Business
- Daily Mail
Two of the UK's best-known bread brands near historic £75m merger
Two of Britain's breadmakers could become one, as Hovis and Kingsmill are nearing a merger agreement. Under the proposed deal, Associated British Foods, which owns Kingsmill's parent company Allied Bakeries, would acquire Hovis for around £75million from Endless, its private equity owners, Sky News reports. The deal could wrap up as soon as the end of next week, according to banking sources with knowledge of the merger. Due to the complex nature of the transaction, any deal could take longer to be reached, they said. The two bakers could make cost savings of as much as £50million per year as a result of the merger, it was reported. In May, it was revealed that talks were in progress between the two companies. ABF said it was also exploring other options for Allied Bakeries' future that did not involve Hovis. ABF said: 'Allied Bakeries continues to face 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.' The UK bakery market is worth some £5billion, with the equivalent of 11 million loaves being sold each day. However, the market has contracted in recent years on the back of changing diets and higher bread prices. A merger would see the combined group take the largest market share in the wrapped sliced bread sector. Hovis currently holds a 24 per cent market share, while Allied holds 17 per cent. Combined, the two would surpass the market leader Warburtons, which holds a 34 per cent stake in the market. Sky reports that Warburtons would maintain a higher annual turnover due to its wider product range. A potential deal would likely face probing from the competition watchdog, as a merger would cut the number of major players in the market from three to two. 'What the Competition & Markets Authority may make of matters remains to be seen,' Shore Capital's Clive Black said in May.
Sky News
4 days ago
- Business
- Sky News
Bread producers Hovis and Kingsmill close in on historic merger
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 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 a deal could be formally agreed to combine the businesses as early as the end of next week, although they cautioned the complexity of the transaction meant the timing could yet slip. Confirmation of a tie-up would come nearly three months after Sky News revealed 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 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, down from £477.6m in the 53 weeks to 30 September 2023. Earnings before interest, tax, depreciation and amortisation fell from £20.9m to £18.7m, which Hovis said was the result of the revenue decline and higher distribution costs. "Overall bread share remained stable, despite significant price inflation and the ongoing cost-of-living crisis, demonstrating the resilience of the Hovis brand and its iconic status as one of Britain's most loved food brands," the accounts said. This week, the trade publication The Grocer reported that Britain's big four supermarkets, including Asda and Sainsbury's, had delisted a number of Hovis-branded products. The publication quoted a Hovis spokeswoman as saying the company was "aware of some adjustments to Hovis product lines in certain stores". "We remain fully committed to working collaboratively with our retail partners to grow our mutual businesses." The overall UK bakery market is estimated to be worth about £5bn in annual sales, with the equivalent of 11m loaves being sold each day. Critical to the prospects of a merger of Allied Bakeries, which also owns the Sunblest and Allinson's bread brands, and Hovis taking place will be the view of the Competition and Markets Authority (CMA) at a time when economic regulators are under intense pressure from the government to support growth. Warburtons, the family-owned business which is the largest bakery group in Britain, is estimated to have a 34% share of the branded wrapped sliced bread sector, with Hovis on 24% and Allied on 17%, according to industry insiders. A merger of Hovis and Kingsmill would give the combined group the largest share of that segment of the market, although one source said Warburtons' overall turnover would remain higher because of the breadth of its product range. Responding to Sky News' report in May of the talks, ABF said: "Allied Bakeries continues to face 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." In a separate presentation to analysts, ABF - which is also in the process of closing its Vivergo bioethanol plant in Hull after pleading for government support - described the losses at Allied, which also owns own-label bread manufacturer Speedibake, as unsustainable. The company does not disclose details of Allied Bakeries' financial performance. Prior to its ownership by Endless, Hovis was owned by Mr Kipling-maker Premier Foods and the Gores family. At the time of the most recent takeover, High Wycombe-based Hovis employed about 2,700 people and operated eight bakery sites, as well as its own flour mill. Hovis's current chief executive, Jon Jenkins, is a former boss of Allied Milling and Baking.
Irish Independent
18-07-2025
- Business
- Irish Independent
Penneys' sales slip to €742m amid poor weather last summer
Owned by Associated British Foods, Penneys trades as Primark in all its other global markets. As of last September, there were 38 Penneys stores in Ireland, compared to 37 a year earlier. The company noted that its trading in the second half of the 2024 financial year, which runs to mid-September, was hit by poor weather. The opening of a new outlet in Bray last summer helped to offset the sales decline. Revenue in the previous financial year was €745m. In 2021, Primark said would invest more than €250m in the Irish market, creating more than 1,000 jobs and increasing selling space by about 20pc. Penneys has also spent €75m building a new distribution centre in Newbridge, Co Kildare, which is slated to open in coming months. It has invested in its Eyre Square store in Galway, extended an outlet in Clonmel, and refurbished its flagship shop on Dublin's Mary Street. The accounts for the Ireland-based Primark Ltd business, which also sells inventory to other Primark entities and earns franchise income, show that its pre-tax profit more than doubled to €882m in the 52 weeks to mid-September last year. Its total turnover hit €4.1bn compared to €3.9bn in the 2023 financial year, while the company paid €110m in tax. Apart from the retails sales generated in Ireland, the firm's turnover included €2.1bn from inter-company sales and nearly €1.3bn from its 'Primark Way' franchise income. The latter is generated from sales of intellectual property and expertise to overseas Primark businesses. Last month, Primark announced that it was cutting about 100 jobs from its head office in Dublin, where the chain was co-founded in 1969 by the late Arthur Ryan. The chain employs about 1,500 people there. The cutbacks will affect staff working in human resources, finance and procurement as the group sends some support functions offshore to Accenture in India. By the end of ABF's last financial year in mid-September 2024, there were 451 Primark stores worldwide, having opened 22 new stores in the period. ADVERTISEMENT 'Primark continue to see significant white space opportunities in our growth markets in Europe and in the US and there is a clear roadmap for new store rollouts over the medium and long term to drive sustainable growth,' say the accounts just filed in Ireland. They add: 'Primark also continue to assess expansion opportunities in new markets. The group recently signed an agreement with the Alshaya Group to explore the opportunity to open stores in the Gulf Cooperation Council in Middle Eastern markets.'
Reuters
14-07-2025
- Business
- Reuters
FTSE 100 hovers near record highs as investors monitor tariffs, rate path
June 13 (Reuters) - The UK's blue chip index held just below its all-time high hit last week as investors assessed the trajectory of U.S. tariffs as well as domestic interest rates, while AstraZeneca gained on successful drug trial results. The blue-chip FTSE 100 (.FTSE), opens new tab was up 0.4% as of 1105 GMT, while the domestically oriented FTSE 250 index (.FTMC), opens new tab added 0.3%. AstraZeneca (AZN.L), opens new tab added 1.4% after the pharmaceutical giant said its experimental drug baxdrostat succeeded in lowering high blood pressure in a late-stage study of people whose condition was hard to control or treat. Associated British Foods (ABF.L), opens new tab rose about 3% after brokerage Panmure Liberum upgraded the retailer to "buy." The European Union and South Korea said they were working on trade deals with the U.S. that would soften the blow from looming tariffs as Washington threatens hefty duties from August 1. Meanwhile, Britain's labour market cooled sharply in June and the number of people available for work jumped at the fastest pace since the COVID-19 pandemic, according to data also watched by the Bank of England. The BoE is expected to cut interest rates next month for the fifth time since last August, with traders betting on an 89% chance of a 25 bps deduction, as per data compiled by LSEG. The country's inflation figures, due on Wednesday, will offer fresh cues on the central bank's rate path. Investors will look out for fresh notes on the nation's fiscal health when finance minister Rachel Reeves, alongside BoE Governor Andrew Bailey, gives the annual Mansion House speech to London's financial sector on Tuesday. Among other stocks, Ashmore gained 2.2% after the emerging markets-focussed asset manager reported slower quarterly net outflows. The FTSE 100 index logged its biggest weekly percentage gain in two months on Friday, led by mining and healthcare stocks.
