UK private equity firm Endless is in discussions to acquire Allied Bakeries from Associated British Foods, in a potential deal that would unite two of Britain’s most prominent bakery brands – Kingsmill and Hovis – under one owner, according to a report by Reuters.
The transaction would represent a major consolidation move in the UK bakery sector and signal a strategic pivot by AB Foods, which has been exploring options for the underperforming Allied Bakeries unit. The division, which includes the Kingsmill, Allinson’s, and Sunblest brands, has weighed on group performance following the loss of a key supply contract with Tesco.
While no deal has been finalised, industry sources suggest that a merger of Kingsmill and Hovis – currently owned by Endless – would likely draw regulatory scrutiny due to the combined entity’s potential market share in packaged bread.
Endless acquired the historic Hovis brand from The Gores Group and Premier Foods in 2020 and has since sought to reposition the business for long-term growth. The firm, which also owns BBF, a UK-based manufacturer of cakes and desserts, is known for executing complex carve-outs and turnaround strategies in the consumer sector.
Founded in 1935, Allied Bakeries has a national footprint of bakeries and depots across the UK. Its disposal would mark a significant portfolio realignment for AB Foods, which also owns fashion retailer Primark and has faced broader margin pressure across its food units, including its sugar business. Last week, the group reported a 10% drop in first-half profit.
AB Foods said Tuesday there is no certainty that talks with Endless will result in a transaction, nor are any terms finalised at this stage. However, the company has indicated it expects to update shareholders on the strategic review of Allied Bakeries in the second half of the year.
The potential acquisition highlights private equity’s ongoing interest in operationally intensive food businesses with turnaround potential. Endless has a track record of backing UK manufacturing and consumer brands and could see synergies in combining Kingsmill’s scale with Hovis’s legacy market position.
AB Foods shares were up 1% on Tuesday, though the stock remains down roughly 21% year-to-date.
