TSCDY Tesco PLC (PK)

By Ian Walker 

LONDON-- Tesco PLC has agreed to buy food wholesaler Booker Group PLC for GBP3.7 billion ($4.66 billion), a deal that Britain's top grocer by market share hopes will allow it to tap the growing market for eating out.

Tesco said the cash-and-share deal would present new opportunities for growth and deliver at least GBP175 million of cost savings, partly through procurement and distribution. It said revenue synergies would be at least GBP25 million a year.

The deal represents the latest sign Tesco is regaining its footing after a checkered spell in which it lost market share to discounters Aldi and Lidl and suffered a costly accounting scandal.

Alongside the deal, Tesco also said it would restart paying dividends in fiscal 2018, reflecting the company's improved performance. It last paid a dividend in December 2014.

Tesco shares jumped 9% on the news in early trading in London, while Booker gained more than 14%.

Booker shareholders will get 0.861 new Tesco shares and 42.6 pence in cash for each share held, giving them about a 16% share of the combined group.

Booker operates a nationwide cash-and-carry network of 200 stores, serving independent retailers, catering and small-business customers and other places where food is available such as pubs and cinemas.

Tesco is the U.K.'s largest supermarket chain, with 3,500 stores.

Booker Chief Executive Charles Wilson and Chairman Stewart Gilliland will join the combined company's board after the deal is complete.

Write to Ian Walker at ian.walker@wsj.com

(END) Dow Jones Newswires

January 27, 2017 03:58 ET (08:58 GMT)

Tesco (PK) (USOTC:TSCDY)
Historical Stock Chart
Von Jun 2024 bis Jul 2024

Tesco (PK) (USOTC:TSCDY)
Historical Stock Chart
Von Jul 2023 bis Jul 2024