Tesco to buy wholesaler Booker
In a statement the supermarket giant said the combined group will be well placed to serve the established 'in home' food market as well as the faster growing 'out of home' food market.
Booker is also the owner of the Londis and Budgens supermarket brands.
Dave Lewis, Tesco chief executive, 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."
The deal will see Booker shareholders receive 0.861 new Tesco shares and 42.6 pence in cash for each Booker Scheme share. Based on Booker’s closing share price on 26 January, the deal values each Booker share at 205.3 pence to mark a premium of approximately 12% to the closing price.
On completion of the merger, Booker chief executive Charles Wilson and Booker chairman Stewart Gilliland will join the combined group's board. Wilson will also join the executive committee.
Wilson said: "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."
Booker shareholders will hold around 16% of the combined group.
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