Saturday 28 January 2017

Tesco Now Considering For A £3.7BN Deal To Buy Booker Wholesale

Tesco

The cash-and-shares tie-up with the FTSE 250 owner of the Londis and Budgens chains creates the country’s biggest food group.

It builds on the turnaround of Britain’s biggest supermarket under chief executive Dave Lewis and answers the acquisition of Argos by Sainsbury’s and Morrisons’ supply deal with Amazon.

Tesco had been slimming down to bolster its finances and focus on its core business, with disposals including its South Korean business and Giraffe restaurants.

The move for Booker will push Tesco into the faster-growing catering market focused on cafes, pubs and restaurants, although it could face scrutiny by competition regulators.

Mr Lewis said it was “the right time for the next evolution of our strategy”.

Tesco

He added: “Tesco has made significant progress in turning around our UK retail business. This merger will further enhance our growth prospects by creating the UK’s leading food business with combined expertise in retail, wholesale, supply 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 CEO Charles Wilson, who will join the combined group’s board, said: “Joining forces with Tesco offers potential major benefits to consumers, customers, suppliers and shareholders.”

Booker investors will hold about 16 per cent of the combined group. Its shares rose 29¼p to 212¼p. Tesco was up 17½p to 206½p.

Retail Economics chief executive Richard Lim said: “This is a game changer. It will strengthen Tesco’s wholesale and supply expertise while its digital capabilities will improve efficiency and provide significant cost-saving.

“As shopper behaviour evolves the group will be placed to capitalise on home shopping and the increasingly important area of eating out which has been the growth driver of the experience economy.”

Tesco says joining forces with Booker will deliver £200million of annual savings after three years.


SHARE THIS

Author:

Etiam at libero iaculis, mollis justo non, blandit augue. Vestibulum sit amet sodales est, a lacinia ex. Suspendisse vel enim sagittis, volutpat sem eget, condimentum sem.

0 comments: