Shares in Tesco (LON:TSCO) have inched lower in London this morning, as the Competition and Markets Authority (CMA) cleared the company’s acquisition of Booker Group (LON:BOK). The move came after the watchdog granted the deal provisional approval last month.
As of 08:51 GMT, Tesco’s share price had lost 0.07 percent to 205.85p, largely in line with losses in the broader market, with the benchmark FTSE 100 index currently standing 0.04 percent lower at 7,541.15 points. Booker’s share price meanwhile is 0.66 percent up at 227.20p, as compared with a 0.04-percent dip in the mid-cap FTSE 250 index.
Tesco-Booker tie-up cleared
The CMA said in a statement this morning that it had concluded that Tesco’s purchase of Booker does not raise competition concerns. The conclusion followed an in-depth investigation of the deal.
“We have carefully listened to feedback from retailers and wholesalers who operate in what are highly competitive UK retail and wholesale sectors,” Simon Polito, Chair of the watchdog’s inquiry group said in the statement. “Retailers have told us that they shop around for the best prices and service from their wholesaler, and we are confident that this will continue after Tesco buys Booker.”
The CMA opened its phase 1 investigation into the merger in May, while at the end of June, the companies requested a ‘fast track’ referral to the next stage of the investigation. Last month, the watchdog cleared the tie-up provisionally, having found out that it “may not be expected to result in a substantial lessening of competition within any market or markets for goods or services in the United Kingdom”.
Merger timetable update
Tesco welcomed today’s unconditional clearance, noting that the merger is pending shareholder approvals, with respective shareholder meetings anticipated towards the end of February, and completion of the merger in March.