The cash and carry operator Booker supplies groceries and alcohol to 700,000 convenience stores, grocers, pubs and restaurants. The Group also owns the Premier, Budgens and Londis convenience store brands.
It is unclear at this stage whether the deal will face any challenge from competition authorities. Speaking to the BBC’s Today programme, Tesco chief executive Dave Lewis called the deal a “low risk” merger, but some have already raised concerns about the fact Booker owns Budgens, Londis and Premier chains and it also supplies Tesco’s rivals.
In a joint statement, the two companies said the combined group would bring benefits for consumers, independent retailers, caterers, small businesses, suppliers, and colleagues, and deliver “significant value to shareholders”.
Richard Lim, chief executive of Retail Economics, is reported to have said the move by Tesco would be a “game changer” in the food industry.
Shares in Tesco increased by more than 10% today after the deal was announced.