• STV
  • MySTV

Tesco's £3.7bn Booker takeover deal backed by watchdog

The supermarket's deal to buy the wholesale group has been provisionally cleared.

Shares in Tesco and Booker rose following the announcement.
Shares in Tesco and Booker rose following the announcement. PA

Tesco's £3.7 billion deal to buy wholesale group Booker has been provisionally cleared by the Competition and Markets Authority (CMA).

Rivals raised competition concerns about the deal, but the watchdog said the supermarket giant and Booker do not compete "head-to-head" in most areas.

The CMA had previously raised fears over 350 local areas of overlap between Tesco and Booker and said it was worried shoppers could face worse terms when buying their groceries as a result of the deal.

But, in justifying its decision, the CMA said: "Tesco does not supply the catering sector to which Booker makes over 30% of its sales."

Shares in Tesco and Booker rose following the announcement.

Booker is the country's largest wholesaler and owns Londis and Budgens as franchised outlets.

Rivals are concerned the deal could see Booker benefit from improved supplier terms, making it difficult for them to compete. The CMA said rival wholesales argued Booker could raise prices to the shops it supplies.

Booker is the country's largest wholesaler.
Booker is the country's largest wholesaler. PA

But on announcing its provisional findings, the CMA said Booker would be able to negotiate better terms from its suppliers for some of its groceries, and that it was likely to pass on these savings to the shops it supplies.

Simon Polito, chair of the CMA's inquiry group, said: "Our investigation has found that existing competition is sufficiently strong in both the wholesale and retail grocery sectors to ensure that the merger between Tesco and Booker will not lead to higher prices or a reduced service for supermarket and convenience shoppers."

The CMA said Booker's share of the UK grocery wholesaling market - less than 20% - was not large enough to spark longer-term concerns.

The watchdog began its investigation in May and launched an in-depth probe in July after Tesco and Booker asked for the inquiry to be fast-tracked. It is due to report its final findings in December.

Tesco welcomed the announcement and said it expected the merger to be complete in early 2018.

"This merger has always been about growth, and will bring benefits for independent retailers, caterers, small businesses, suppliers, consumers and colleagues," a Tesco spokesperson said.

Booker said: "We are pleased that the CMA has provisionally concluded that this transaction does not lessen competition, and will continue to work with the CMA ahead of its publication of a final decision, expected in December."

One account. All of STV.

This field is required. That doesn't look like a valid e-mail format, please check. That e-mail's already in our system. Please try again.
ShowHide
Forgot password?
This field is required. At least 6 characters please. Did you enter your details correctly?
If you've forgotten your details then use the 'Forgot password?' link.
Need to reset your password?

We'll send a link to reset your password to

We've sent you details on how to reset your password

Please check your email and follow the instructions.

Forgotten your email address?

Have you forgotten the email address that you previously joined with? Don't worry, by emailing enquiries@stv.tv we can help.

One account. All of STV.

This field is required. Please enter at least 2 characters
This field is required. Please enter at least 2 characters
At least 6 characters please
ShowHide
This field is required. At least 6 characters please.
You have to be 16 or over to join
This field is required. This doesn't appear to be a valid date
Type your full postcode and select your address This field is required. It doesn't look like you've entered a valid postcode. Can't find your address? Confirm the details you've given us are correct by clicking here

By continuing you agree to our Terms of Use, including our Privacy Policy and Cookie Policy. Any issues contact us.

Upload Profile Picture

Please make sure your image is under 2mb in size and a valid JPG, PNG or GIF.

Are you sure?

Unfortunately, you'll be unable to access our premium content. We’ll be sorry to see you go, but if you change your mind you can rejoin us at any time.

Please verify your STV account

Please verify your STV account using the email we sent you. If you have lost the email, we can send you another one, just click the button below.

Thanks

We've sent you a new verification email.
Please check your email and follow the instructions to verify your account.

Welcome to STV
Thanks for joining us.

Oops!

Sorry, you must be at least 12 years old to place a vote for your Real Hero.

Please review our Voting Terms of Use for more information.

Oops!

Sorry! It seems that you are using a browser that is incompatible with our voting service.

To register your vote please copy the below URL in to your regular mobile browser. We recommend Google Chrome, or Safari.

http://shows.stv.tv/real-heroes/voting

Oops!

Sorry, you seem to have already voted in this category.

Thanks for voting

Now share your vote with friends on your social network

Share on twitter Share on facebook

Cast your vote

Please register or sign in to continue.

Cast your vote

This field is required. This doesn't appear to be a valid date

Cast your vote

Please fill out this form to cast your vote. As you are under 16 years old you will not create an STV account. Why do we need these details?

This field is required. Please enter at least 2 characters
This field is required. Please enter at least 2 characters
This field is required. That doesn't look like a valid e-mail format, please check.
Location This field is required.
Parental Consent This field is required.

That's you. All that's left is to click the 'Submit Vote' button below. By doing so, you confirm that you and your parent or guardian have read and accept our Voting Terms of Use, Privacy Policy and Cookie policy, and that the details you have entered are correct. We'll look after them as carefully as if they were our own.