Associated British Foods is set to announce on Tuesday whether it will proceed with the demerger of its Primark fashion chain from its food businesses, a move that could reshape the Weston family’s £17.7bn empire.
The decision comes after a strategic review launched last year with Rothschild & Co, aimed at maximising long-term value by separating the group’s fashion and food arms. Primark, which operates 486 stores across 19 markets and contributes over half of ABF’s profit, has been a key driver of the Weston family’s wealth, with its revenue growing 61% between 2020 and 2024.
However, the timing is challenging. Both divisions face mounting pressures: Primark is grappling with rising freight and energy costs linked to the Iran conflict, whereas ABF’s food businesses — including sugar, bakery ingredients and brands like Ovaltine and Twinings — are under strain in US cooking oils and bakery markets. The group warned in January that annual sales would be flat year-on-year and profits down, a trend analysts say has worsened since.
Shares in ABF have fallen 14% over the past year, reflecting investor concern over the group’s ability to navigate these headwinds. CEO George Weston, who leads the third-generation family-controlled business, had said in November that a Primark separation was the “working assumption” of the review, with a conclusion expected by April 21 when first-half results are published.
The review is being conducted in consultation with Wittington Investments, the Weston family’s holding company, which has pledged to maintain majority ownership in both entities post-demerger. Analysts at RBC Capital Markets, including global co-head of consumer and retail Richard Chamberlain, say the split makes sense due to limited synergy between the fashion and food operations, though they caution that growth prospects for both standalone businesses remain challenging.
Internal moves also signal intent. Last month, ABF appointed Eoin Tonge — formerly its finance chief and interim Primark CEO since March 2025 — as the permanent head of Primark, alongside Filip Ekvall, a former H&M executive, as chief commercial officer. These appointments are widely interpreted as preparation for a standalone fashion business.
Adding complexity, ABF remains under investigation by the UK competition watchdog over a proposed merger between its Allied Bakeries (owner of Kingsmill) and rival Hovis. To address competition concerns, the group has offered to sell its Northern Irish bakery business.
Despite the operational and regulatory hurdles, several analysts believe the demerger is likely to go ahead, driven by the Weston family’s long-term approach to stewardship. As one observer noted, the family is “very serious about things and therefore not prone to flights of fancy,” suggesting any split will be carefully weighed rather than hastily executed.
Why is ABF considering a demerger of Primark and its food businesses?
ABF says the review, assisted by Rothschild & Co, aims to maximise long-term value by separating operations with limited synergy, allowing each business to be better understood and valued by financial markets.
What challenges are affecting both Primark and ABF’s food divisions?
Primark faces rising freight and energy costs due to the Iran conflict, while ABF’s food businesses are under pressure in US cooking oils and bakery ingredients markets, contributing to flat sales and declining profits group-wide.