Associated British Foods’ planned acquisition of Hovis has cleared a major hurdle after the Competition and Markets Authority provisionally found the deal would not harm competition in Great Britain, though it warned the transaction could raise concerns in Northern Ireland.
The CMA said its interim findings showed the deal was unlikely to create competition issues in Great Britain because, if the transaction does not proceed, Allied Bakeries is expected to exit the supply of bread and other bakery products anyway.
However, the regulator has taken a different view in Northern Ireland, where it provisionally believes the merger could substantially lessen competition in the supply of bread and certain other bakery products.
The CMA said consumer preferences and the competitive landscape in Northern Ireland differ materially from Great Britain, including the strength of local bakery categories and brand positions.
ABF, which owns Allied Bakeries and brands including Kingsmill, agreed in August 2025 to acquire Hovis from Endless as it looks to combine the two businesses’ production and distribution operations and create a more sustainable UK bread business.
Responding to the interim report, an ABF spokesperson said: “The CMA’s Interim Report is welcome recognition that, against a challenging financial backdrop for the wrapped and sliced bread sector, this transaction will help to deliver a far more effective competitor that will be able to invest in innovation and growth, to the benefit of consumers and the wider UK economy.”
The spokesperson added: “We have been clear with the CMA that the transaction is the only route to creating a sustainably profitable business. The CMA has recognised that, if the transaction is not allowed to proceed, Allied Bakeries will be unable to continue operating under current market conditions.”
ABF said it would continue to engage with the watchdog, including over its Northern Ireland operations, in order to secure regulatory clearance as efficiently as possible.
The CMA has set a deadline of 5pm on Thursday 16 April for responses to the interim report. It has also asked the parties to submit any proposed remedies by 5pm on Thursday 9 April.
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