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Tesco acquires food wholesaler Booker for USD 4.7 billion to create Britain's leading food retail business

Britain's Biggest Supermarket Chain Tesco Announced On Friday That It Has Agreed To Acquire Food Wholesaler Booker For 3.7 Billion Pounds (USD 4.7 Billion).

News Nation Bureau | Edited By : Gautam Lalotra | Updated on: 27 Jan 2017, 03:07:42 PM
Tesco - File Photo

New Delhi:

Britain's biggest supermarket chain Tesco announced on Friday that it has agreed to acquire food wholesaler Booker for 3.7 billion pounds (USD 4.7 billion).

The blockbuster transaction billed as a merger will hand Tesco investors a majority stake in the combined company and create Britain's leading food business, the pair said in a statement.

Tesco, which has been troubled in recent years by an accounting scandal and fierce domestic competition from German-owned discounters Aldi and Lidl, added it was seeking to "enhance" its growth prospects.

"Tesco has made significant progress in turning around our UK retail business," said Chief Executive Dave Lewis.

"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."

The group expects annual pretax synergies of at least 200 million pounds within three years of completion. It also aims to achieve 175 million pounds of extra cost savings in areas like distribution and procurement.

"By bringing together Tesco and Booker's retail and wholesale expertise, supply chain and digital capabilities, the combined group will be able to provide greater choice, quality, price and service in the food market, whilst improving efficiency and reducing food waste," the statement added.

"The combined group will bring together the capacity and capability to generate new growth and deliver significant revenue and cost synergies."

The cash-and-shares transaction will hand Booker 16 percent of the new company. Booker investors will receive 0.861 new Tesco share and 42.6 pence in cash for every share they own.

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First Published : 27 Jan 2017, 02:49:00 PM

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