1029 GMT - A potential merger between AB Foods' Allied Bakeries and Endless' Hovis would be positive, as the combination would provide scale necessary to survive a challenging market, Panmure Liberum says after AB Foods confirmed talks exploring the transaction. The U.K. bakery market is characterized by an intense competition for volumes and a price-sensitive consumer backdrop, analysts Anubhav Malhotra and Wayne Brown write. Therefore, a potential merger could unlock significant cost efficiencies needed for the turnaround of both businesses, they say. While the deal would be in line with the long-term interests of all stakeholders, given that both companies might struggle to remain viable independently, a merger between the second and the third largest companies in the sector is likely to attract regulatory scrutiny, they say. AB Foods shares are down 0.7% at 20.36 pounds. (michael.susin@wsj.com)

(END) Dow Jones Newswires

May 06, 2025 06:34 ET (10:34 GMT)

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