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ABF considers Primark demerger amid strategic review

Economy & businessEconomy
Key Points
  • ABF is considering a Primark demerger amid a strategic review and expected disappointing results.
  • ABF faces a competition watchdog investigation into a bakery merger and has offered to sell its Northern Irish business.
  • External pressures include the Middle East conflict and a recent leadership change at Primark.

The review was conducted with advisory company Rothschild & Co, and ABF's annual sales are likely to be flat year on year with profits down. The company is also embroiled in an investigation by the competition watchdog into a planned merger between its Allied Bakeries and rival Hovis. To allay competition concerns, ABF has offered to put its Northern Irish business up for sale.

External pressures include the conflict in the Middle East, which is expected to have added to trading pressures for ABF. Primark also saw a leadership change last month with the appointment of Eoin Tonge as its new boss. Several analysts believe the split from Primark remains likely to go ahead.

It is not yet known whether ABF will officially announce the demerger this week or what specific details such as timing and structure might involve. The outcome of the competition watchdog investigation and how the sale of the Northern Irish business will affect the merger approval process also remain uncertain.

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