Tesco merger with Booker wins support of shareholders; combined business to start next week

Tesco’s £3.7bn merger with wholesaler Booker has won approval from shareholders.

Following support from the supermarket group’s investors, Tesco confirmed in a statement that Booker’s shareholders had now also backed the deal.

The combined business is expected to start operating on 5 March 2018.

Dave Lewis, group chief executive at Tesco, said: “I’m delighted that the shareholders of both companies have supported the merger.

"This merger is about growth, bringing together our complementary retail and wholesale skills to create the UK’s leading food business. This opens up new opportunities to provide food wherever it is prepared or eaten, in home or out of home.”

The Competition and Markets Authority gave the tie-up full clearance late last year following a provisional ruling in November 2017.

The partners have said the merger will bring cost savings of at least £175m, mainly in areas such as procurement and distribution.

Approximately 35% of these cost savings (£61m) are expected to come from distribution and fulfillment activities.

Optimising a joint national distribution system of Tesco and Booker, the statement said, is “expected to lead to material benefits” too.

Tesco also anticipates savings in relation to final mile deliveries.