CMA gives final blessing for £3.7bn Tesco-Booker merger

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Tesco-Booker

Tesco’s £3.7 billion acquisition of wholesaler Booker has been given the final all-clear after an investigation determined it would not lead to higher prices or impact on service for shoppers.

The Competition and Markets Authority (CMA) said its probe into the proposed merger also found it did not raise competition concerns despite fears raised by rival wholesale groups.

The final approval comes after the CMA gave a provisional go ahead for the merger in November.

Back in May the CMA officially launched its probe into the proposed deal, amid criticism from across the grocery and convenience sector, which included threats of shareholder revolts and an alliance of the UK’s largest grocery wholesalers voicing concerns that the deal would “threaten the survival of the independent retailer”.

The competition watchdog said Tesco and Booker do not directly compete with each other in most sectors in which they operate, especially the catering sector, which is the source of more than 30 per cent of Booker’s sales.

The CMA also said it “carefully” considered the impact on competition on convenience grocery stores supplied by Tesco – such as those that fall under Premier, Londis and Budgens chains – but found the Big 4 grocer cannot have any direct influence.

“We have carefully listened to feedback from retailers and wholesalers who operate in what are highly competitive UK retail and wholesale sectors,” said Simon Polito, the chair of the CMA’s inquiry group investigating the merger.

“Retailers have told us that they shop around for the best prices and service from their wholesaler, and we are confident that this will continue after Tesco buys Booker.”

He added it had been an “important investigation”.

“Millions of people use their local supermarket or convenience store to buy their groceries or essentials, so it is vital that they have enough choice to secure the best deal for them,” Polito said.

“Having examined the evidence in depth, we are satisfied this will remain the case following the merger.”

Tesco and Booker welcomed the decision and said the deal is now expected to complete next March.

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