Tesco has today announced a £3.7bn merger with Booker Group, the UK’s leading food wholesaler. Booker supplies 450,000 caterers, including Wagamama, Rick Stein and Carluccio’s, 120,000 independent retailers, and 700,000 small businesses. The parties have said that the merger is about unlocking new growth and creating the UK’s leading food business.
Tesco is the UK’s leading retailer serving the £110bn ‘in home’ food market. Through Booker’s wholesale business the merger will bring access to the rapidly growing £85bn ‘out of home’ food market that includes restaurants, takeaways and other small businesses. Benefits of the merger will include better availability and pricing of quality food for consumers, broader market opportunities for suppliers and enhanced digital and delivery service options for independent retailers, caterers and small businesses.
The combined business is also expected to generate synergies of at least £200m by the end of the third year following the merger through revenue opportunities and procurement, distribution and central cost efficiencies.
Frontier advises Tesco and Booker on issues of strategy, planning and competition policy.
For more information, please contact media@frontier-economics.com or call +44 (0) 20 7031 7000