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Tesco reveal surprise £3.7bn mega merger with UK food wholesaler

UK grocer Tesco has announced it is to merge with the food wholesaler, Booker Group plc, which operates the Makro, Londis and Budgens brands, in a massive £3.7bn deal.

The deal, which values Booker shares at around 205.3 pence per share, will create what Tesco has dubbed ‘the UK’s leading food retailer’, combining both firm’s retail, wholesale, supply chain and digital expertise.

Booker, which also operates the Happy Shopper and Premier brands amongst a raft of other food businesses, boasted revenues of over £4bn in 2015 and is the UK’s largest wholesale food operator.

Following completion of the deal, Booker’s current Chief Executive, Charles Wilson, and Chairman, Stewart Gilliland will join the newly combined group’s Board, with Wilson also sitting on the Group’s Executive Committee.

Commenting on the agreement, Dave Lewis, Chief Executive Officer of Tesco 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’s 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.”