Premier Foods to prune roster after RHM buyout

Premier Foods' £1.2bn acquisition of rival RHM has put the companies' respective ad agencies on alert.

Insiders widely expect the ad accounts to be slimmed down. Premier Foods currently uses DLKW for Ambrosia and Branston Pickle, and Clemmow Hornby Inge for Loyd Grossman, while Publicis handles OXO.

RHM's Hovis brands use DDB London, while McCann Erickson works on Manor Bakeries brand Mr Kipling as well as Bisto, Sharwood's and Robertson's.

The cash-and-shares deal, which was finalised on Monday morning, creates the UK's biggest food company, with combined sales of about £2.5bn and an annual ad budget in excess of £20m.

The merged entity is planning to exploit its position as the UK's biggest food supplier by taking advantage of synergies the company claims will save £85m a year.

Premier Foods has already announced plans to integrate RHM's culinary brands, cake and customer partnerships divisions into its grocery operations, which could lead to redundancies.

Premier Foods already owns the UK and Ireland operations of Campbell Soup, which it purchased for £460m in July, and the Quorn brand. Premier also bid for United Biscuits in the summer, but was thwarted by Blackstone Partners, which acquired the biscuit manufacturer in a deal worth £1.6bn.

No one at Premier Foods was available for comment.

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