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Tesco to buy Budgens and Londis owner Booker Group Tesco to buy Budgens and Londis owner Booker Group
(35 minutes later)
The UK's biggest supermarket group, Tesco, has agreed to buy the UK’s biggest food wholesaler, Booker Group, in a £3.7bn deal.The UK's biggest supermarket group, Tesco, has agreed to buy the 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".The firms said the deal would create the "UK's leading food business".
Booker Group is the UK's largest cash and carry operator, supplying everything from baked beans to teabags to 700,000 convenience stores, grocers, pubs and restaurants.Booker Group is the UK's largest cash and carry operator, supplying everything from baked beans to teabags to 700,000 convenience stores, grocers, pubs and restaurants.
Booker also owns the Premier, Budgens and Londis convenience-store brands.Booker also owns the Premier, Budgens and Londis convenience-store brands.
Live: Reaction to Tesco deal
Under the terms of the deal, Booker shareholders will end up owning about 16% of the combined group.Under the terms of the deal, Booker shareholders will end up owning about 16% of the combined group.
Speaking to the BBC's Today programme, Tesco chief executive Dave 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.Speaking to the BBC's Today programme, Tesco chief executive Dave 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.He dubbed the deal a "low risk" merger.
By combining with Booker Group, Tesco is expanding beyond its traditional food retailing business and making strides into the restaurant and takeaway food sectors.By combining with Booker Group, Tesco is expanding beyond its traditional food retailing business and making strides into the restaurant and takeaway food sectors.
"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," said Mr Lewis."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," said Mr Lewis.
Mr Lewis said rising prices from suppliers had played no part in the decision to sign the deal.Mr Lewis said rising prices from suppliers had played no part in the decision to sign the deal.
Analysis: Rob Young, BBC business reporterAnalysis: Rob Young, BBC business reporter
The tie-up between Tesco and Booker Group will create a food giant that not only sells products in supermarkets but in tens of thousands of independent retailers, some of them Tesco's rivals, and in hundreds of thousands of cafes and restaurants.The tie-up between Tesco and Booker Group will create a food giant that not only sells products in supermarkets but in tens of thousands of independent retailers, some of them Tesco's rivals, and in hundreds of thousands of cafes and restaurants.
The deal is likely to attract the attention of the competition authorities.The deal is likely to attract the attention of the competition authorities.
In recent years, Tesco has been in crisis, losing market share in the tough retail market and selling off or closing parts of the company.In recent years, Tesco has been in crisis, losing market share in the tough retail market and selling off or closing parts of the company.
Tesco has sold its South Korean arm, its Turkish business and the Giraffe restaurant chain. Today sees a change of tack for the company.Tesco has sold its South Korean arm, its Turkish business and the Giraffe restaurant chain. Today sees a change of tack for the company.
Not only is it expanding again, it also plans to resume its dividend payment next year - a sure sign the company sees a brighter financial future.Not only is it expanding again, it also plans to resume its dividend payment next year - a sure sign the company sees a brighter financial future.