LONDON — The UK’s Competition and Markets Authority has fast-tracked an in-depth Phase 2 investigation into Associated British Foods’ planned purchase of Hovis, escalating scrutiny of a tie-up that would combine two major branded sliced-bread rivals, Jan. 8, 2026.
The watchdog said it has formally referred the Hovis takeover for a full inquiry under its fast-track procedure, setting a statutory deadline of June 24 for its Phase 2 decision. In practice, that makes the Hovis deal a high-stakes test of whether AB Foods can convince regulators the merger won’t leave shoppers paying more or facing less choice in pre-packaged bread and related bakery goods.
Why the Hovis deal jumped straight to Phase 2
Fast-tracking does not mean the CMA has reached a final view. It typically means the companies are opting to skip the remainder of Phase 1 and move directly to the deeper investigation, where an independent panel examines evidence, hears from rivals and customers, and tests remedies.
AB Foods, which owns Kingsmill via Allied Bakeries and also controls Primark, said it wants to secure clearance “as efficiently as possible” and will work “constructively with the CMA” to make the case that the transaction benefits consumers. the company’s comments were published after the regulator’s referral in its response to the Phase 2 referral.
The CMA’s case file indicates the inquiry will focus on competition in UK markets where both groups supply pre-packaged bread, including branded sliced loaves. If concerns are upheld, the CMA can require remedies such as divestments, supply commitments, or (in rarer cases) block the Hovis deal outright.
What the CMA will test in the Hovis deal
The logic of the deal rests on scale. AB Foods has argued that combining Hovis with Allied Bakeries would create a more sustainable, investable bread business in a category facing pressure from shifting diets, discounting and the growth of artisanal and specialty loaves. But the CMA will weigh those claimed efficiencies against the risk that fewer big brand owners could weaken competitive pressure in supermarket aisles.
The regulator’s published case page sets the timetable and provides contact details for interested parties to submit views, including retailers, wholesalers and competitors via the CMA’s ABF/Hovis merger inquiry page.
Deal roots and a shrinking bread market
The Hovis deal has been months in the making. In mid-2025, the Financial Times reported that AB Foods’ Allied Bakeries was in talks with Hovis owner Endless about a potential combination as industrial bakers grappled with declining volumes and high fixed costs in earlier reporting on the merger talks.
AB Foods announced the agreement to buy Hovis in August 2025 in a move pitched as a route to cost savings and a stronger branded position, while acknowledging the headwinds facing packaged sliced bread when the deal was first unveiled. The CMA then opened its initial review in December, with a Phase 1 deadline that is now moot because of the fast-track referral when the CMA began its inquiry.
On Thursday, the watchdog confirmed it would proceed directly to a Phase 2 investigation after the companies’ fast-track request, as first reported by Reuters in its report on the fast-tracked probe.
For AB Foods, the outcome matters beyond bread. A clearance would allow it to pursue a consolidation strategy in a tough category; a refusal or heavy remedies could limit the planned integration and the economics of the Hovis deal.
