The UK's competition regulator has formally opened an investigation into the planned acquisition of the iconic bread brand Hovis by food giant Associated British Foods (ABF).
Formal Phase One Investigation Underway
The Competition and Markets Authority (CMA) confirmed on Friday, 19 December 2025, that it has initiated a phase one probe into the deal. This move was widely anticipated after ABF struck the agreement in August to purchase the 135-year-old business from its US private equity owner, Endless.
ABF has stated its intention to merge Hovis with its existing Allied Bakeries division, which is responsible for producing well-known brands such as Kingsmill and Allinson's. The combined entity would become a significant force in the UK baking industry, positioned to compete more directly with rivals like Warburton's and a growing array of supermarket own-label products.
Background and Regulatory Scrutiny
The CMA's decision to launch a formal review follows a preliminary call for comments in September, where it invited interested parties to share views on how the merger might affect competition. The regulator has now set a deadline of 19 February to decide whether the deal warrants a more in-depth, phase two investigation.
An ABF spokeswoman commented on the development, stating: "This formal step is an important milestone and follows ABF working constructively with the CMA to outline the challenges and changes taking place in the UK’s bakery sector." She added that the company would continue to cooperate to demonstrate how the transaction could create a more sustainable competitor capable of greater investment and innovation.
Strategic Rationale and Sector Challenges
The proposed takeover comes after ABF commenced a strategic review of its Allied Bakeries business, which has faced financial difficulties in recent years. The company cited intense cost pressures and shifts in consumer demand as key factors behind the losses.
ABF argues that the merger will enable the consolidation of production and distribution networks across the two businesses, leading to what it describes as "significant cost synergies and efficiencies." The outcome of the CMA's investigation will be crucial in determining whether this consolidation proceeds and reshapes the competitive landscape of the British bread market.
