The UK’s biggest supermarket group, Tesco, has agreed to buy UK’s biggest food wholesaler, Booker Group, in a £3.7bn deal.
The firms said the deal would create the “UK’s leading food business”.
They added that combining the companies would bring benefits for “consumers, independent retailers, caterers, small businesses, suppliers, and colleagues”.
Under the terms of the deal, Booker shareholders will end up owning about 16% of the combined group.
“Tesco has made significant progress in turning around our UK retail business,” said Tesco 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.”
Speaking to the BBC’s Today programme, Mr Lewis said he believed the deal would not face a challenge from competition authorities, as the deal would not result in Tesco owning any more stores.
He dubbed the deal a “low risk” merger.
Mr Lewis said rising prices from suppliers had played no part in the decision to sign the deal.
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