Shareholders have approved the Tesco takeover of Booker – the final step in deal. It means the merged business will start trading from Monday, 5th March.
Tesco chief executive Dave Lewis 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’ – and will benefit our customers, suppliers, colleagues and shareholders.”
Tesco launched its £3.7 billion bid for Booker, the wholesale group which owns Makro, Premier and Londis, in January of last year.
Tesco expects cost synergies for the combined group to reach a run rate of at least £175 million a year by the end of the third year following completion of the deal.
Distribution and fulfilment would account for some 35 per cent of this – about £61m. Tesco highlighted opportunities in logistics and delivery, and improved efficiency and service standards.
“Optimising a joint national distribution system of Tesco and Booker is expected to lead to material benefits, including sharing parts of the fleet and expanding click and collect services. Tesco also anticipates savings in relation to final mile delivery to customers.”
An even larger proportion of the synergies (55 per cent) are expected to come from procurement. It pointed to the potential for improved purchasing cost efficiencies and sharing best practice across each of the three main types of supplier: fresh, own label and branded.