Tesco wins UK regulator’s provisional approval for Booker takeover

Supermarket group Tesco won provisional approval for its £3.7 billion of wholesaler Booker from the UK competition regulator on Tuesday, moving Britain's biggest retailer closer to securing a new avenue of growth.

The Competition and Markets Authority (CMA) said it had conducted an in-depth review and provisionally concluded that Tesco's purchase of Booker does not raise competition concerns.

Tesco’s move on Booker in January sparked further consolidation in Britain’s £185 billion grocery market as supermarkets seek additional sources of growth.

Analysts expect more M&A activity as supermarkets seek to utilise excess capacity within their supply chains.

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Tesco wins provisional approval for Booker takeover

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“The wholesale trade in particular will be wondering why on Earth it ever bothered engaging at all with the CMA, an organisation that seemingly lives in a different universe,” said Shore Capital analyst Clive Black.

“If Tesco and Booker can merge with unconditional approval, then the scope for further large-scale consolidation cannot be ruled out,” he said.

The provisional clearance will come as a big relief to Tesco. Most analysts had expected it would have to agree to store divestments or restrictions on operations to gain clearance. – Reuters