Tesco ‘committed to’ Booker deal

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Your email address will not be published.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 *

Subscribe to our newsletters

Supply Chain Assistant

Speciality Drinks
London NW10 7SF, UK

On-Trade Regional Sales Manager

Anthony Byrne Fine Wines
West Midlands & Northants

Supply Chain Co-ordinator

Speciality Drinks
London NW10 7SF, UK

Logistics Team Leader

Speciality Drinks
London, UK

Key Account Executive

Berkmann Wine Cellars
London, UK

Assistant Operations Manager

Speciality Drinks
London, UK

London Business Development Manager

Vine Distribution Services
Chelmsford, UK

Off-Trade Account Manager

Justerinis & Brooks
London, UK

Sales Account Manager x 2

Berkmann Wine Cellars
London, UK

Wine Sales Development Manager

Fuller's
London, UK

Vinitaly 2019

Verona,Italy
7th Apr 2019

The Wine & Spirits Show

London,United Kingdom
12th Apr 2019

Vinexpo Bordeaux

Bordeaux,France
13th May 2019
Click to view more

The Global Riesling Masters 2018

View Results

Rioja Masters 2018

View Results

Click to view more