Shareholders vote in favour of Tesco and Booker merger
Booker shareholders voted in favour of the £3.7bn merger by a majority of 83.57% at midday today.
The merger needed 75% of Booker shareholders to vote in support of the deal.
Their support followed that of Tesco shareholders who voted for the deal with an 85.22% majority this morning. Tesco only needed a 50% majority in favour to push the merger through.
Delighted
Dave Lewis, group chief executive of Tesco, said: "I'm delighted that the shareholders of both companies have supported the merger.
"This merger is about growth, bringing together our complementary retail and wholesale skills to create the UK's leading food business. This opens up new opportunities to provide food wherever it is prepared or eaten - 'in home' or 'out of home' - and will benefit our customers, suppliers, colleagues and shareholders."
CMA approval
Tesco has said the deal would give suppliers “a broader market opportunity and strong growth prospects”. It said the merger would benefit suppliers and small businesses.
The merger was approved by the Competition and Markets Authority (CMA) in December. The decision came after an in-depth examination of the deal by the watchdog, following the announcement of the merger in January 2017.
The CMA concluded that the deal would not cause negative implications for Tesco’s rivals or consumers, as the two companies did not compete head-to-head in their activities. It also examined whether the merged company would raise prices or reduce service quality but found this was unlikely.
Clive Black, head of food at analysts Shore Capital, said: "We have been expecting the shareholders of Booker and Tesco to approve the proposed merger; to not do so at this late would have been a major failure of understanding by both parties and a surprise. As is often the case, such events are utilised by some vested interests to be noisy and opportunistic, but they have had their day in the sun; it is refreshing to see some of the noise fundamentally ignored.
"Indeed, if the shareholders of Booker and Tesco had rejected the deal then it would have been a very, very bad day for Charles Wilson and Booker investors in particular; we were astonished by the brass neck shown by some event investors around this, redefining opportunism."
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