Tesco’s £3.7bn takeover of Booker is given the green light

By Laura Mullan
Tesco’s £3.7bn takeover of food wholesaler Booker Group has been given the provisional go-ahead by the competition watchdog. The announcement brushe...

Tesco’s £3.7bn takeover of food wholesaler Booker Group has been given the provisional go-ahead by the competition watchdog. 

The announcement brushes aside warnings that the deal would allow the supermarket giant to crush rival suppliers to restaurants and smaller stores.

SEE ALSO:

Booker is the UK’s largest food wholesaler with brands such as Premier, Budgens and Londis

Tesco has 3,200 UK stores whereas Booker supplies 117,000 independent retailers. 

If the deal went ahead, Tesco would become Britain’s biggest food wholesaler, with an estimated turnover close to GBP£60bn. 

This is a move which several of Booker’s rivals including Spar say should be blocked. 

Simon Polito, Chairman of the Competition and Markets Authority (CMA) inquiry group, said that the investigation found that “existing competition is sufficiently strong in both the wholesale and retail grocery sectors”.

The CMA provisionally said that the two groups did not compete head-to-head in most of their activities.

It notes that this was particularly the case in the catering sector, where Booker makes 30% of its sales and Tesco does not have a presence.

The deal also requires support from more than 50% of Tesco shareholder and 75% of Booker shareholders respectively. 

The retail sector has seen shifting trends in recent times. 

With changing consumer habits, fierce competition from discount retailers like Lidl and the entry of Amazon has encouraged retailers to bolster their businesses by buying food wholesalers.

This week, Nisa’s £137mn takeover of the Co-operative Group was approved and Morrisons has also recently signed a deal to become the UK wholesale supplier to c-store chain McColls 
 

Share

Featured Articles

Ahold Delhaize Targets Sustainability & Omnichannel Goals

Multinational food business Ahold Delhaize prioritises sustainability and omnichannel innovation as part of its new plan for financial and strategic goals

US Bird flu Turns Spotlight on Milk Pasteurisation

As bird flu sees sales of raw milk spike, we look at the work of Tetra Pak, a giant in the world of pasteurisation.

Nestlé 'Meeting Sustainability Targets on Nescafé Coffee'

Nestlé is meeting targets on sustainably-sourced Nescafé coffee, & has donated 21mn plants as part of global ESG initiatives, a company report claims

Coffee Prices Soar as Extreme Weather Hits Brazil & Vietnam

Drink

Guinness & Carlsberg Back Drought Resistant Grain for Beer

Drink

Tyson Foods Shares Plummet in Face of Costs & Inflation

Food