CMA provisionally concludes that this takeover does not raise competition concerns
Tesco’s £3.7bn takeover of food wholesaler Booker has been given a provisional go-ahead by the competition watchdog, which said the deal would not result in higher prices or a poorer service for shoppers.
Tesco is the UK’s biggest supermarket, with a market share of about 28 per cent while Booker is Britain’s largest food wholesaler.
An investigation into the deal by the Competition and Markets Authority (CMA) found that Tesco and Booker, owner of convenience chains including Londis and Budgens, do not compete head-to-head in most of their activities. In particular, it said that Tesco does not supply goods to the catering sector.
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“Millions of people use their local supermarket or convenience store to buy their groceries or essentials. Strong competition in the market ensures that shoppers can choose the best deal for them,” said Simon Polito, chair of the inquiry group.
“Our investigation has found that existing competition is sufficiently strong in both the wholesale and retail grocery sectors to ensure that the merger between Tesco and Booker will not lead to higher prices or a reduced service for supermarket and convenience shoppers,”Polito added.
Welcoming the decision, Tesco said: “We look forward to creating the UK’s leading food business, bringing together our combined expertise in retail and wholesale. This merger has always been about growth, and will bring benefits for independent retailers, caterers, small businesses, suppliers, consumers, and colleagues.”