Tesco set to buy Booker in £3.7bn deal
Supermarket Tesco is set to buy food wholesaler Booker in a deal reportedly worth £3.7bn. Tesco’s group chief executive Dave Lewis said that the move would be “the next evolution” of Tesco’s business strategy.
“Tesco and Booker are quite different businesses we but we have a lot in common – a focus on food,” Lewis told the BBC.
The companies expect that the “synergies” from a merger will be worth at least £200m a year by the third year after completion.
The deal has been recommended by both boards, but it still needs approval from regulators and both companies’ shareholders.
In addition to its wholesale business, Booker also owns the Budgens and Londis convenience store brands. This could pose competition issues for the deal – although Booker operates a franchise model, whereby the stores are owned independently by the retailer.
Assuming the merger goes ahead and it includes the Budgens and Londis chains, it will be interesting to see whether we will see an integration of the Tesco and Londis click and collect offerings.
