June 29, 2017 / 7:40 AM / 24 days ago

Tesco and Booker want UK regulator to 'fast track' competition probe

2 Min Read

FILE PHOTO: A woman walks past a Tesco supermarket in central London, December 9, 2014.Toby Melville/File Photo

LONDON (Reuters) - Britain's biggest retailer Tesco (TSCO.L) and its takeover target Booker (BOK.L) have asked the UK competition regulator to "fast track" examination of their 3.7 billion pound ($4.8 billion) deal to a more detailed second stage, they said on Thursday.

Tesco and the wholesaler Booker announced the cash and shares deal in January and the Competition and Markets Authority (CMA) formally started its initial Phase 1 review on May 30.

The CMA is assessing whether the deal could reduce competition and choice for shoppers and other customers, such as stores currently supplied by Booker. The initial investigation was due to run until July 25.

"We have now requested that the CMA uses the fast track process to allow it to move more quickly to examining the merger through a detailed Phase 2 process," the companies said.

They said they expect the CMA to issue a decision to refer to Phase 2 within the next two weeks.

The transaction will be cleared if that inquiry, which lasts up to 24 weeks, does not find it will reduce competition. If competition is seen to be affected, the CMA can either seek remedies or block the deal.

FILE PHOTO: A branded sign is displayed outside of a Booker Wholesale store in London, Britain January 27, 2017.Neil Hall/File Photo

A spokeswoman for Tesco said it expected the deal to complete in January.

Tesco sees the deal as a new source of growth given Booker's role as a major distributor to the catering industry.

FILE PHOTO: Tesco Group Chief Executive, Dave Lewis speaks at an analyst presentation in London, Britain, April 12, 2017.Hannah McKay /File Photo

Some Tesco shareholders have criticized the deal, saying it was overpaying and a distraction from its turnaround plan.

Booker supplies convenience chains including Budgens and Londis, restaurants such as Wagamama and Carluccio's and also operates the Makro cash and carry business.

Shares in Tesco, which on Wednesday announced 1,200 head office job cuts, were up 0.1 percent at 172 pence at 0708 GMT. Booker shares were flat at 187.4 pence.

The deal values Booker shares at 190.7 pence.

($1 = 0.7715 pounds)

Reporting by James Davey; editing by Kate Holton

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