A&O Shearman is advising Associated British Foods plc on its acquisition of Hovis Group

ABF has been evaluating a range of strategic options for Allied Bakeries, its UK bakery business. Profitability at Allied Bakeries has been increasingly challenged in recent years by a decline in demand for pre-sliced, packaged bread and a loss of scale in Allied Bakeries’ nationwide distribution network serving the major retailers with daily delivery of bread and bakery goods.  

Hovis Group is an integrated bakery business, engaged in the production and distribution of bread and bakery products in the UK. The acquisition will combine the production and distribution activities of the two businesses, driving significant cost synergies and efficiencies, to create a profitable UK bread business that is sustainable over the long term.  

The completion of the transaction is subject to regulatory approval. 

The transaction highlights A&O Shearman’s position as a global leader in consumer M&A. 

The A&O Shearman team is led by partner Annabelle Croker, with senior associates Anthony Bowen and Laura Milward-Lynch, and supported by associates Toluwa Agboola and Charles Ng, and trainee Asfia Mohsin. The A&O Shearman team acted alongside Macfarlanes LLP who advised on antitrust matters. 

Annabelle Croker, global head of consumer & retail, commented: “We are delighted to be supporting our longstanding client ABF on this strategic acquisition which will position the combined business to compete effectively and establish a platform for product innovation to meet evolving consumer tastes”.