Bakery business Dean’s of Huntly has acquired rival shortbread manufacturer Duncan’s of Deeside in a move that will increase its market share in the premium sector.

Bill Dean, managing director of Dean’s, said the acquisition of the “well-established, high-quality business” builds on the company’s recent organic growth.

The combined business is aiming for £20m in revenue and production will move to Huntly. All Duncan’s employees will be offered jobs.

“By coming together, we are creating a stronger, more innovative business that is better equipped for the future – and one that adds even more value for our valued employees and customers,” he said.

Paul Duncan, co-owner and managing director of Duncan’s, will remain with the combined business to help deliver the next phase of growth.

Dean’s, established in 1975, manufactures shortbread, biscuits and savoury cheese bites. It also makes gluten-free and plant-based shortbread. It has 130 employees.

In what it desribed as a “hugely challenging” year to the end of June 2023 it posted a sharp increase in pre-tax losses to £447,921 from 145,305 in the previous 12 months.

Turnover fell 19.5% to £8.3m from £10.3m a year earlier.

Duncan’s makes shortbread and oatcakes. It was originally headquartered in Laurencekirk. The company’s products are available in the UK and abroad.