Tesco merges with Booker in $4.7 billion deal

IndustriesAssociated Press

Tesco, Britain's biggest supermarket chain, has agreed to buy food wholesaler Booker Group for 3.7 billion pounds ($4.7 billion), as it seeks to boost growth by supplying products to rivals such as convenience stores and independent retailers.

Tesco says it will pay the equivalent of 205.3 pence in cash and stock for each Booker share, 12 percent more than the closing price on Jan. 26.

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CEO Dave Lewis says the merger will "enhance Tesco's growth prospects by creating the U.K.'s leading food business with combined expertise in retail, wholesale, supply chain and digital."

Analyst Richard Lim of Retail Economics says Tesco's "laser-like focus on the core U.K. food business is cutting deeper down the supply chain."