Tesco Merges with Booker at 3.7bn

Tesco merged with cash and carry wholesale supplier Booker in a £3.7bn in a deal or 205.3p per share, it claims will create UK’s leading food business and the deal means Tesco can boast 5,400 stores and 2, 900 small shops, including Tesco Express, Metro and One Stop Brands and will save £200m a year and boost annual profits by £25m after three years. Booker Shareholders will hold 16 per cent of the combined entity and will receive 42.6p cash, according to Tesco. This deal represent a 12 per cent premium on Booker’s closing price of 183.1p on January 26, 2017.

According to Euromonitor the deal will leap Tesco shares from 17% to 28%

Booker is a cash-and-carry wholesaler that supplies food to 120, 000 independent retailers nationwide from it 172 depots and 30 Makro brand and also owns Londis, Budgens and Premier brands which operate on a franchise. Booker also supply food service to high-street chains like Wagamama and pubs, caterers and Rick Stein’s restaurants. Its digital department clocked up £1bn of its annual £5bn sales from its Booker Direct Online services, catering to major cinemas and Marks and Spencer.

The acquisition will boost Tesco’s wholesale and supply chain expertise and its digital capabilities will improve efficiency and provide significant cash-saving synergies.