TESCO is to buy wholesaler Booker for £3.7 billion.
The boards of both companies have agreed the share and cash deal, which will see Tesco move into the pub and restaurant supply market for the first time. Booker’s customer base includes independent on-trade outlets as well chain restaurants and convenience stores.
After the companies are merged Booker shareholders will own 16% of the combined business.
Tesco chief executive Dave Lewis 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. Wherever food is prepared and eaten – ‘in home’ or ‘out of home’ – we will meet this opportunity with the widest choice and best service available.”