Premier Foods has announced a deal with US investment company The Gores Group which will see £45 million invested in its Hovis brand.

Under the terms of the deal, the American firm will take 51% in the bread division of the British food group.

Commenting on the transaction, Gavin Darby, chief executive officer of Premier Foods, said: "This is exciting news for the bread business and a great deal for Premier Foods. We can now focus our attention and resources on developing our category leading grocery brands. I'm delighted that we've found a strong partner in The Gores Group who will help provide the investment necessary to develop the bread business. This will be good for our customers, our employees and all those connected with the business. A joint venture arrangement also means we will share in the future gains from this investment as the business continues its return to profitable growth, helping us maximise value creation. Both parties are excited by the opportunities this transaction brings."