The boards of the UK’s leading food retailer Tesco and the UK’s leading food wholesaler Booker Group have today (Friday January 27) announced a £3.7 billion merger.
Booker is the owner of the Londis and Budgens convenience chain brands.
The firms said the deal would create ‘the UK’s leading food business’. They claimed the combined group would be well placed to serve the large, established ‘in home’ food market as well as the faster growing ‘out of home’ food market.
Commenting on today’s announcement, Tesco chief executive officer 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.”
Booker chief executive officer Charles Wilson 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.”
Under the terms of the deal, Booker shareholders will end up owning about 16% of the combined group. Each Booker shareholder will receive 0.861 new Tesco shares and 42.6 pence in cash. Based on Booker’s closing share price on 26 January, the deal values each Booker share at 205.3 pence.
On completion of the merger, Charlie Wilson and Booker chairman Stewart Gilliland will join the combined group’s board.