I want to collapse or expand sub-sequences of a list

e.g. ['A', 'B', 'D', 'E', 'H'] -> ['AB', 'DE', 'H'] and vice versa

currently I wrote some ugly code like:

while True:
  for i, x in enumerate(s):
    if x == 'A' and s[i+1] == 'B':
      s[i:i+2] = 'AB'
      break
  else:
    break

For people who asking 'why do that thing':

Actually I'm working on a optimizing compiler and this is the peephole part. Writing pattern matching is a little annoying.