FDBusiness.com

Tesco and Booker Announce Surprise £3.7 Billion Merger

 Breaking News
  • Fazer Becomes Market Leader in Gluten-free Bakery Products Fazer Group is continuing to execute its growth strategy and invest in growing product categories by acquiring Vuohelan Herkku’s bakery and mill businesses. Vuohelan Herkku is one of the forerunners...
  • C&C Group Chief Retires C&C Group, the Irish and British drinks business, has announced that Stephen Glancey has stepped down as CEO and will leave the company at the end of February. Stephen Glancey...
  • KK Foods Plans £5.5 Million Expansion KK Fine Foods, a leading frozen food manufacturer based at Deeside in Wales, is set to expand and diversify with support from the Welsh Government, creating an additional 40 new...
  • Nestlé Launches Fund to Boost Packaging Innovation Nestlé has announced that it will invest up to SFr2 billion (€1.86 billion) to lead the shift from virgin plastics to food-grade recycled plastics and to accelerate the development of...
  • Bosch Packaging Technology is Now Syntegon Syntegon Technology is the new name for Bosch Packaging Technology, following the sale of the former Bosch division. Headquartered in Waiblingen, Germany, Syntegon Technology’s business focus is on intelligent and...

Tesco and Booker Announce Surprise £3.7 Billion Merger

Tesco and Booker Announce Surprise £3.7 Billion Merger
January 30
10:46 2017

The boards of Tesco, the UK’s leading food retailer, and Booker Group, the UK’s leading food wholesaler, have reached an agreement on the terms of a recommended share and cash merger to create the UK’s leading food business. The combined group will be well placed to serve the large, established ‘in home’ food market as well as the faster growing ‘out of home’ food market.

By bringing together Tesco and Booker’s retail and wholesale expertise, supply chain and digital capabilities, the combined group will be able to provide greater choice, quality, price and service in the food market, whilst improving efficiency and reducing food waste. The combined group will bring together the capacity and capability to generate new growth and deliver significant revenue and cost synergies.

Dave Lewis, chief executive of Tesco.

Dave Lewis, chief executive of Tesco, comments: “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.”

Charles Wilson, chief executive of Booker, says: “Booker is committed to improving choice, prices and service for the independent retailers, caterers and small businesses that we are proud to serve. We believe that joining forces with Tesco offers the potential to bring major benefits to end consumers, our customers, suppliers, colleagues and shareholders.”

The deal places a value of approximately £3.7 billion for Booker’s ordinary share capital. The merger will result in Booker Shareholders owning approximately 16% of the combined group (based on the existing issued ordinary share capital of Tesco and Booker) and sharing in the benefits accruing to the combined group via attractive growth prospects and the realisation of significant revenue and cost synergies.

The Tesco board expects pre-tax synergies for the combined group to reach a run-rate of at least £200 million per annum by the end of the third year following completion of the merger. Quantified revenue synergies of at least £25 million per annum are anticipated to come by the end of the third year following completion of the merger, primarily from an enhanced offering and customer proposition. The merger is also expected to enable opportunity for cost synergies of at least £175 million, mainly in areas such as procurement and distribution.


Warning: count(): Parameter must be an array or an object that implements Countable in /home/fdbusiness/public_html/wp-content/themes/legatus-theme/includes/single/post-tags.php on line 5
Share

About Author

mike

mike

Related Articles

Food & Drink Business Conference & Exhibition 2016

Upcoming Events

[eventlist]

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber

Subscribe Here



Advertisements