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Booker Group to buy Budgens and Londis | Booker Group to buy Budgens and Londis |
(34 minutes later) | |
Booker Group, Britain's biggest cash-and-carry wholesaler, is to buy local grocery chains Londis and Budgens. | |
Booker has said that it will pay £40m to Ireland's Musgrave Retail Partners for Londis' 1,630 convenience stores and Budgens' 167 franchise outlets. | Booker has said that it will pay £40m to Ireland's Musgrave Retail Partners for Londis' 1,630 convenience stores and Budgens' 167 franchise outlets. |
Londis and Budgens have struggled to maintain their share of the British grocery market amid a supermarket price war. | Londis and Budgens have struggled to maintain their share of the British grocery market amid a supermarket price war. |
They chalked up a combined operating loss of £7.4m in 2014. | They chalked up a combined operating loss of £7.4m in 2014. |
"The grocery market in Great Britain is experiencing fundamental and permanent structural change, with intense competition and a deflationary environment," said chief executive Chris Martin of Musgrave Group. | "The grocery market in Great Britain is experiencing fundamental and permanent structural change, with intense competition and a deflationary environment," said chief executive Chris Martin of Musgrave Group. |
"Given these challenging market dynamics, we carefully evaluated all of the possible options for our [British] business." | "Given these challenging market dynamics, we carefully evaluated all of the possible options for our [British] business." |
Musgrave has owned Londis and Budgens since 2002. | Musgrave has owned Londis and Budgens since 2002. |
Booker said that access to its supply chain and economies of scale are expected to boost Londis and Budgens' financial performance. | Booker said that access to its supply chain and economies of scale are expected to boost Londis and Budgens' financial performance. |
"We anticipate that the acquisition will be earnings neutral in the first complete year of ownership and earnings enhancing thereafter," said Booker. | "We anticipate that the acquisition will be earnings neutral in the first complete year of ownership and earnings enhancing thereafter," said Booker. |
Completion of the acquisition depends on the approval of the Competition and Markets Authority. | Completion of the acquisition depends on the approval of the Competition and Markets Authority. |
As well as announcing the deal, Booker also reported its full-year results, with pre-tax profits rising 14% to £138.8m. | As well as announcing the deal, Booker also reported its full-year results, with pre-tax profits rising 14% to £138.8m. |
Shares in Booker jumped on news of its results and the planned acquisition. By mid-morning they were up more than 10% at 167.70p. | Shares in Booker jumped on news of its results and the planned acquisition. By mid-morning they were up more than 10% at 167.70p. |
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