Kingsmill’s owner has said it has agreed to buy rival Hovis and plans to merge the companies in a move that would create the UK’s biggest bread brand.
Associated British Foods (ABF) which also owns Primark, Ryvita and Twinings, said it would cut costs to make the two currently loss-making businesses profitable.
The Unite union represents workers at Hovis and Kingsmill and warned it would “not tolerate attacks on jobs, pay or conditions”.
Warburtons is the current market leader in UK breadmaking and the deal would need approval from the competition watchdog in order to go ahead.
Sales of Kingsmill and Hovis loaves are thought to have fallen flat due to a drop in demand for basic pre-packaged bread, as speciality breads such as sourdough and ciabatta took a bigger slice of the market.
Sandwiches and toast are also off the menu for some British consumers who are cutting back on carbohydrates in favour of high-protein diets.
ABF told investors on Friday it had reached an agreement to buy historic brand Hovis from private equity owner Endless. The BBC understands the deal is worth an estimated £75m.
It said the combined business would be “better placed to compete effectively” and to create new products “as a result of changing consumer tastes and needs.”
ABF’s Allied Bakeries business, which makes Kingsmill and Allinson’s bread, first confirmed talks over a potential deal three months ago.
Hovis, which was founded in 1890, was bought by Endless in 2020 from Premier Foods, which owns the Mr Kipling brand.
ABF said the deal would lead to “significant costs synergies and efficiencies” in an effort to create a sustainably profitable bread business.
George Weston, chief executive of ABF said: “This solution will create value for shareholders, provide greater choice for consumers and increase efficiencies for customers.”
But Unite general secretary Sharon Graham said: “While there is still a long way to go before any buyout happens, Hovis and Kingsmill must ensure that jobs are protected.”
She said Unite would be working to ensure the two brands fully involve the union in any decisions that impact its members.
The deal requires approval from the Competition and Markets Authority.
