Tesco ‘committed to’ Booker deal

29th March, 2017 by Arabella Mileham

Tesco said it remained committed to its merger with Booker, despite warnings from two of its shareholders that the deal is too costly.

In January, the retailer announced its surprise £3.7 billion merger deal with Booker, the UK’s biggest food wholesaler, which is anticipated to make it one of the UK’s leading food business. As part of the deal, Booker’s highly regarded CEO Charles Wilson will join the board of Tesco, but the merger also seems to have signalled the departure of Tesco senior non-executive director, Richard Cousins at the start of January.

In a statement this week, a Tesco spokesman said it always listened closely to the views of its shareholders, but said that after working on the deal for more than 12 months, it believe the strategic and financial rationale was “compelling”.

“We are confident that it will enhance our recovery plans for Tesco and deliver substantial benefits to customers and shareholders,” they said.

The retailer argued that move would unlock “more synergies than Booker’s operating profit for the 2016 financial year and deliver a return in excess of our cost of capital in the second year” while strategically, it would enable Tesco to enter the out-of-home food consumption market, which was growing fast.

“Since announcing the transaction the majority of our top 10 shareholders have chosen to increase their shareholding in Tesco and we hope to convince all our shareholders of the merits of the transaction,” they said.

The wholesaler stocks a large selection of beers, wines and spirits, and Wilson has said the deal will open up greater choice for independent convenience retailers and off-licenses. However there have been fears that it will allow Tesco to monopolise supply in the market, particularly given its own convenience estate, which includes Tesco Metro and One Stop.

Booker currently has around 125,000 retail customers, which including supplying more than 5,400 independent retailers in the UK who are Premier, Londis, Budgens or Happy Shopper franchisees.

Leave a Reply

Your email address will not be published. Required fields are marked *

Please note that comments are subject to our posting guidelines in accordance with the Defamation Act 2013. Posts containing swear words, discrimination, offensive language and libellous or defamatory comments will not be approved.

Subscribe to our newsletters

Job vacancies

Sales Account Manager

Jascots Wine Merchants
London, UK

Marylebone Sales Manager

Philglas & Swiggot
Marylebone, London, UK

Area Sales Manager

Bon Coeur Fine Wines
North England, UK

Procurement Assistant – Wine

Adnams PLC
Southwold, UK

Account Manager Central London

Speciality Drinks Ltd
London, UK

Brand Ambassador

Speciality Drinks Ltd
London, UK

National Business Development Manager

Speciality Drinks Ltd
London, UK

Marketing Assistant

Hatch Mansfield
Ascot, Berkshire, UK

Marketing Manager

Bancroft Wines
London, UK

Regional Sales Manager – Scotland

Bancroft Wines
London, UK

Sales Manager – London On-Trade

Bancroft Wines
London, UK

Customer Service & Sales Support Executive

Jascots Wine Merchants
London, UK

Market Insight Analyst

Conviviality PLC
London, UK

Technical Manager

Enotria&Coe
Park Royal, London, GB

The Global Sparkling Masters 2017

Deadline : 25th August 2017

The Global Malbec Masters 2017

Deadline : 25th August 2017

Global Chardonnay Masters 2017

Deadline : 1st September 2017

The Global Sauvignon Blanc Masters 2017

Deadline : 1st September 2017

Click to view more

The Global Rosé Masters 2017

With wines from the palest of pink to almost ruby red, bone dry to almost cloyingly sweet, reductively handled to barrel-aged, as well as gently spritzy to fully sparkling.

The Global Organic Masters 2017

The drinks business is thrilled to announce the launch of The Global Organic Masters

The Drinks Business Awards 2017

Now in its 15th year, the db awards have become the most authoritative, internationally respected badge of achievement in the alcoholic drinks industry.

The Asian Cabernet Sauvignon Masters 2017

the drinks business Hong Kong announces its first year of The Asian Cabernet Sauvignon Masters.

Click to view more