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Tesco announces deal to buy wholesaler Booker

27th January 2017

Tesco, Britain’s biggest supermarket group, is to buy Booker, the UK’s largest food wholesaler and the owner of Londis, Budgens and Makro, in a £3.7bn deal.

The supermarket giant has unveiled an agreed share and cash merger that values Booker at £3.7bn, “to create the UK’s leading food business”. The two companies claimed that the combined group will “bring benefits for consumers, independent retailers, caterers, small businesses, suppliers, and colleagues, as well as delivering significant value to shareholders”.

Tesco chief executive Dave Lewis said: “Tesco has made significant progress in turning around our UK retail business. 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."

Under the terms of the deal, each Booker shareholder will receive 0.861 Tesco shares and 42.6p in cash.

Booker shareholders will own 16% of the combined business.

The deal has been unanimously recommended by both boards, but needs approval from regulators and both sets of shareholders. Booker’s chief executive Charles Wilson and its chairman Stewart Gilliland will join the combined group’s board.

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