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December 21, 2017updated 05 Jan 2018 8:42am

CMA clears Tesco and Booker merger in UK

The UK's Competition and Markets Authority (CMA) has cleared the merger of Tesco with food wholesaler Booker after examining the evidence from a large number of wholesalers, suppliers and retail chains, as well as a survey of hundreds of retailers.

The UK’s Competition and Markets Authority (CMA) has cleared the merger of Tesco with food wholesaler Booker after examining the evidence from a large number of wholesalers, suppliers and retail chains, as well as a survey of hundreds of retailers.

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The merger was cleared by a group of independent CMA panel members, who noted that Tesco and Booker do not come head-to-head with each other in most of their activities, and Tesco’s purchase of Booker does not raise competition concerns.

Booker currently supplies its products to shops such as Premier, Londis and Budgens, which do compete with Tesco’s offerings, and the panel members considered the impact of this activity carefully before giving their clearance to the merger.

“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.”

According to the CMA panel, Booker is a wholesaler and does not own the shops it supplies, and the retailers have the freedom to set their prices and decide which products to stock.

The group also studied if Tesco’s dominance in the retail sector could enable the merged company to raise prices or reduce service quality at either the wholesale or retail levels, and found that this situation is unlikely to take place due to the existing strong competition in wholesale and retail markets.

The competition authority also considered concerns that, after the merger, Booker could use Tesco’s buying power to purchase groceries from suppliers at lower prices, affecting other wholesalers in the market.

CMA concluded that the wholesale market would remain competitive in the longer term, as Booker’s share of the UK grocery wholesaling market was not sufficient to justify these longer-term concerns.

CMA inquiry group chair 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.”

Free Report
img

2022: So far In Venture Capital

Global investment in 2022 has been majorly dominated by North America, Europe, and Asia Pacific, whereas the Middle East, and South and Central America have recorded low investments comparatively. In light of this, Europe and North America have been identified as the major destinations for Private Equity and Venture Capital (PE/VC) investments.   GlobalData’s whitepaper analyzes which sectors PE/VC firms have been investing in, looking at Technology, Media, and Telecom, with these sectors recording $356 billion and a deal volume of over 10,000 deals in 2022. Healthcare, Financial Services, Business & Consumer Services, and Construction sectors have also seen high investment activity by PE/VC firms, recording a deal value of over $70 billion each.   But what can this mean for you?   Understand how the Deals Database on GlobalData Explorer can be leveraged to:  
  • Track the Aggregate Investment Volumes in PE/VC-Stage firms across geographies and sectors, in addition to viewing the specific deals that drove these volumes
  • Identify the top investors already active in any sector-Geography combinations
  • Assess the Performance of Financial and Legal Advisors, supporting the Dealmaking in any segment of choice (Customizable League tables)
  • Understand what is driving the PE/VC fundraising (Deal Rationale)
  Consult our full report here and optimize your business strategy.
by GlobalData
Enter your details here to receive your free Report.