Tesco won provisional acceptance for its proposed £3.7 billion ($4.9 billion) takeover of wholesaler Booker from the united kingdom competition regulator on Tuesday, moving Britain’s biggest retailer closer to securing a fresh avenue of growth.
The Competition and Market segments Authority (CMA) said, after conducting an in-depth review, that it had provisionally concluded that Tesco’s purchase of Booker does not raise competition concerns.
Tesco as a merchant and Booker as a good wholesaler supplying caterers and independent stores including Premier, Londis and Budgens, usually do not compete head-to-head in most of their actions, the CMA said.
In particular, it found that Tesco does not provide you with the catering sector to which Booker produces over 30 percent of its sales.
“Our investigation has found that existing competition is sufficiently solid in both the wholesale and retail grocery sectors to make sure that the merger between Tesco and Booker won’t bring about higher prices or a reduced provider for supermarket and convenience shoppers,” said Simon Polito, couch of the CMA’s inquiry group.
The CMA is now inviting further comment and evidence before arriving at a final view, it said.