The U.K. competition regulator has decided to investigate Tesco PLC's (TSCO.LN) proposed 3.7 billion pounds ($4.75 billion) cash and stock deal to acquire food wholesaler Booker Group PLC (BOK.LN).
The Competition and Markets Authority said Tuesday the first phase of its investigation into the consequences for competition in the sector would run until July 25.
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Tesco agreed in January to buy Booker for 3.7 billion pounds ($4.76 billion), a deal which combines 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.
The CMA investigation follows Tesco's formal notification to the regulator of the Booker transaction.
At 1116 GMT, Tesco shares were trading 1.1% lower at 185 pence each. Booker shares trading 1.1% lower at 201 pence.
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(END) Dow Jones Newswires
May 30, 2017 07:45 ET (11:45 GMT)