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Tesco to merge with Britain's biggest food wholesaler Booker in £3.7bn deal Tesco to merge with Britain's biggest food wholesaler Booker in £3.7bn deal
(35 minutes later)
Tesco on Friday announced that it was merging with Booker, the UK's leading food wholesaler, in a £3.7bn deal that will create the UK's leading food business. Tesco on Friday announced that it was merging with Booker, the UK's top food wholesaler, in a £3.7bn deal that will create the UK's leading food business.
In a statement, Tesco said that the combined group will bring benefits for consumers, independent retailers, caterers, small businesses, suppliers, and colleagues, and deliver “significant value to shareholders”. In a statement, Tesco, Britain's biggest supermarket, said that the combined group will bring benefits for consumers, independent retailers, caterers, small businesses, suppliers, and colleagues, and deliver “significant value to shareholders”.
Under the terms of the deal, each Booker shareholder will receive 0.861 new Tesco shares and 42.6 pence in cash. Based on Tesco’s closing share price on Thursday, the deal values each Booker share at 205.3p, which represents a premium of approximately 12 per cent to the closing price.Under the terms of the deal, each Booker shareholder will receive 0.861 new Tesco shares and 42.6 pence in cash. Based on Tesco’s closing share price on Thursday, the deal values each Booker share at 205.3p, which represents a premium of approximately 12 per cent to the closing price.
More follows As a result of the merger, Booker shareholders will own approximately 16 per cent of the combined group.
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.”
Tesco has endured a turbulent few years and has been plagued by a major accounting scandal.
In September 2014, the supermarket released a statement to the stock exchange in which it admitted that it had identified a £250m overstatement of first-half profits for that year.
The UK’s supermarket watchdog later found that Tesco deliberately and repeatedly withheld money owed to suppliers to boost its sales performance artificially, in a serious breach of supermarket regulations.
Scores of investors sued the company as a result, alleging they lost millions because they bought shares on the basis of misleading accounts.
But during the second half of last year, the group has tried hard to move on from that and turn its business around. Late last year market researcher Kantar Worldpanel said Tesco's sales were rising at the fastest pace for three years. The stock rallied hard in 2016 too.