The two companies will operate as Hovis Bakeries under the brand line ‘Nourishing the Nation’. The business will reportedly invest in the segments of the UK bakery category that are growing as a result of changing consumer tastes and needs, including healthy options.

The company said that the acquisition of Hovis Group and its combination with ABF bakery business Allied Bakeries will aim to “create a sustainably profitable UK bakeries business for the long term”.

It is said that the integration of the two businesses is expected to deliver “substantial operational synergies and efficiencies” across production and distribution, with the intention of driving improved profitability, strengthening business resilience and enabling investment in brands and product innovation.

ABF said it expects the acquisition to be “marginally dilutive” to its earnings in financial year 2027.

“This is an exciting opportunity to create a large and transformative UK bakery business.”

George Weston, chief executive of Associated British Foods, commented: “The completion of this transaction is a significant step towards the delivery of a profitable UK bread business. By combining our expertise, scale and capabilities with targeted investment into new product categories, this business can return to growth, provide greater consumer choice, serve our customers better than ever and so create value for shareholders.

“The transaction will support the wider UK economy, including by securing high-quality jobs. I am confident that our uniquely capable team have the right plans to build this business.”

Sarah Arrowsmith, chief executive of Hovis Bakeries, said: “This is an exciting opportunity to create a large and transformative UK bakery business. We will now begin the work of revitalising our brands through innovation, becoming the UK’s best own-label bakery partner and strengthening our position as the bakery industry’s route to market through our unique direct-to-store network.”