UK-based retailer Tesco and food wholesaler Booker have reached an agreement for a share and cash merger to create a leading food business.
Under the £3.7bn deal, Booker’s shareholders will receive 0.861 new Tesco shares and 42.6p in cash, and following the merger, shareholders will assume a 16% ownership of the combined group.
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It will also result to cost savings of approximately £175m, primarily in aspects such as procurement and distribution, as well as boost revenue to up to £25m per annum at the end of third year of closure of the merger.
The merger will provide more choice, quality, price and service in the food market, while ensuring efficiency and limiting food waste. It will also benefit independent retailers, caterers, small businesses, suppliers and deliver value to shareholders.
Booker CEO Charlie Wilson will join the combined company’s board and executive committee.
Commenting on the merger, Wilson said: “We believe that joining forces with Tesco offers the potential to bring major benefits to end consumers, our customers, suppliers, colleagues and shareholders.”
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By GlobalDataSubject to regulatory approvals, the merger is expected to be completed at the end of this year or early next year.
