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Tesco's £3.7bn takeover of Booker is cleared


The competition regulator has formally cleared Tesco’s £3.7bn deal to buy wholesaler Booker, declaring it has no concerns following an in-depth review.

The Competition and Markets Authority’s (CMA’s) decision meant the proposed tie-up, first announced in January, was now able to proceed to shareholder votes.

Tesco is the UK’s largest grocery retailer while Booker is the largest wholesaler – supplying many of Tesco’s competitors.
Following a consultation on its provisional findings last month, the CMA declared it was satisfied there were no implications for rivals or consumers.
It said: “Tesco, as a retailer, and Booker, as a wholesaler, do not compete head-to-head in most of their activities.
“However, since Booker supplies shops – such as Premier, Londis and Budgens – that do compete with Tesco, the group considered the impact of this carefully.
“Booker does not own the shops it supplies and these retailers are free to set their prices and decide which products to stock. So, although these shops compete with Tesco, Booker cannot directly determine how they compete.

“Given Tesco’s influence generally in the retail sector, the CMA also examined whether the merged company could raise prices or reduce service quality at either the wholesale or retail levels. It found that existing strong competition in wholesale and retail made this unlikely.”
Chair of the CMA inquiry, Simon Polito, said: “We have carefully listened to feedback from retailers and wholesalers who operate in what are highly competitive UK retail and wholesale sectors.
“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.”

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Tesco and Booker welcomed the clearance.
Tesco said: “We anticipate respective shareholder meetings towards the end of February 2018, and completion in March 2018.”

Source: Sky

About Business Ideas UK

My name is Joel Bissitt. I have been an entrepreneur for 24 years and have run many small businesses across various sectors. For the last 10 years I have worked mainly within online media, franchising and small business start-ups.

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