UK competition watchdog to probe AB Foods' Hovis purchase

Dec 19 (Reuters) - Britain's competition regulator will investigate Associated British Foods' deal to buy bread brand Hovis from private equity firm Endless, it said on Friday.

AB Foods had announced in August an agreement to buy the 135-year-old Hovis, giving it another big UK bread brand on top of Kingsmill so it can better compete in a market that has seen a decline in demand for the packaged sliced loaf.

AB Foods' Allied Bakeries unit also owns the Sunblest and Allinson's brands.

A probe by the Competition and Markets Authority (CMA) had been expected because Hovis has about 18% of the sliced, packaged bread market, while Allied Bakeries has about 6%. Industry leader Warburtons has about 28%.

The CMA said it would decide by February 19 2026 whether to conduct a more in-depth "phase 2" probe.

(Reporting by Nithyashree R B in Bengaluru and James Davey in London; editing by William James)