£3.7b Deal for Tesco and The Booker Group

tesco-bookerTesco, Britain’s biggest supermarket group, has announced it is to buy the Booker Group in a £3.7bn deal.

Booker Group is the UK’s largest cash and carry operator and also owns the Premier, Budgens and Londis convenience-store brands.

The share and cash merger will “create the UK’s leading food business” according to Dave Lewis, chief executive of Tesco.

“This merger with Booker will further enhance Tesco’s growth prospects by creating the UK’s leading food business with combined expertise in retail, wholesale, supply chain and digital. Wherever food is prepared and eaten – ‘in home’ or ‘out of home’ – we will meet this opportunity with the widest choice and best service available,” he said.

Under the terms of the deal, Booker shareholders will end up owning about 16% of the combined group.

The deal has been unanimously recommended by both boards, but needs approval from regulators and both sets of shareholders.

Charles Wilson, chief executive of Booker, added: “Booker is committed to improving choice, prices and service for the independent retailers, caterers and small businesses that we are proud to serve. We believe that joining forces with Tesco offers the potential to bring major benefits to end consumers, our customers, suppliers, colleagues and shareholders.