UK Regulator Refers Tesco's Acquisition of Booker for Further Investigation

By Ian Walker Features Dow Jones Newswires

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.

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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

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July 12, 2017 03:04 ET (07:04 GMT)