Tesco to Purchase Booker in $4.6 Billion Deal

The U.K.’s biggest retailer’s takeover of the wholesale company shows a sunnier outlook for Tesco.

February 01, 2017

LONDON – Tesco flexed its retail muscle this week with the announcement that it would be taking over wholesaler Booker for $4.6 billion, Retail News Asia reports. The move comes after 24 months of a slow recovery for the U.K.’s largest retailer.

Tesco CEO Dave Lewis took the helm two years ago, and has gradually turned the company around following an accounting scandal by focusing on its core grocery business in England. Currently, Tesco enjoys a 28% market share in the supermarket trade. “It’s the next evolution of our strategy … We think it’s the right time,” Lewis said.

Both Tesco and Booker will work together on addressing the increasing food market in Britain. Analysts hailed the takeover as evidence that Tesco is fully recovered. “The Tesco of old is back,” said John Ibbotson of Retail Vision. “This is an extremely bold move and demonstrates an intent and sense of purpose that have been missing for the best part of a decade.”

Booker brings additional contacts in the café, pub and restaurant industries, which is accelerating in Britain. Booker also supplies nearly half a million catering outlets, including Carluccio’s and Wagamama. “This merger with Booker will further enhance Tesco’s growth prospects by creating the U.K.’s leading food business with combined expertise in retail, wholesale, supply chain and digital,” Lewis said.

Lewis anticipates that the deal will be finalized later this year or early in 2018.

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