AB Foods in bakery deal talks with Hovis owner

(Reuters) -Associated British Foods said on Tuesday it was in talks with private equity firm Endless LLP, owner of British bakery Hovis, about a potential deal for its Allied Bakeries business.

Sky News had reported over the weekend that Associated British Foods and 135 year-old Hovis are negotiating a landmark industry deal that would attract scrutiny from competition regulators.

Primark owner AB Foods has been looking at strategic options for its loss-making Allied Bakeries business after it lost a contract with supermarket Tesco.

Lower sales and losses at Allied Bakeries - maker of Kingsmill, Allinson’s and Sunblest products - has been a drag on AB Food's performance.

Founded in 1935, its national network of bakeries and distribution depots spans the country north-south from Glasgow to London, and east-west from Stevenage to Cardiff, according to its website.

(Reporting by Yadarisa Shabong in Bengaluru; Editing by Nivedita Bhattacharjee)