UK Regulator Refers Tesco's Acquisition of Booker for Further Investigation
July 12 2017 - 2:19AM
Dow Jones News
By Ian Walker
LONDON--The U.K. Competition and Markets Authority said
Wednesday it is referring the merger between the U.K.'s number one
grocer Tesco PLC (TSCO.LN) and wholesaler Booker Group PLC (BOK.LN)
for further investigation as it believes the deal could lead to
worse terms for shoppers.
The regulator said there are more than 350 local areas that
currently overlap between Tesco shops and Booker-supplied "symbol"
stores. It reckons there is potential for Booker to reduce the
wholesale services or terms it offers the "symbol" stores it
currently supplies, in order to drive customers to their local
Tesco.
The statutory timetable for the in-depth Phase II investigation
is 24 weeks, which means the final report will be published before
Christmas.
On May 31 the CMA said it would investigate Tesco's proposed 3.7
billion pounds ($4.74 billion) cash and stock deal to buy Booker.
The deal, announced in January, would combine the U.K.'s largest
retailer with the country's largest food wholesaler, a surprise
move that could bring hefty cost savings for the supermarket
operator.
Write to Ian Walker at ian.walker@wsj.com; @IanWalk40289749
(END) Dow Jones Newswires
July 12, 2017 03:04 ET (07:04 GMT)
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