Tuesday 12 December 2017

Call to speed up Tesco takeover scrutiny

Tesco Group CEO Dave Lewis, who has led a turnaround strategy at the retailer. Photo: Reuters
Tesco Group CEO Dave Lewis, who has led a turnaround strategy at the retailer. Photo: Reuters

James Davey

Tesco and its takeover target, Booker, have asked the UK's competition regulator to "fast track" examination of their £3.7bn (€4.2bn) deal to a more detailed second stage.

Tesco, which has been headed by group CEO Dave Lewis since 2015, and the wholesaler Booker announced the cash and shares deal in January.

Britain's Competition and Markets Authority (CMA) formally started its initial Phase 1 review on May 30. The CMA is assessing whether the deal could reduce competition and choice for shoppers and other customers.

The initial investigation was due to run until July 25.

"We have now requested that the CMA uses the fast track process to allow it to move more quickly to examining the merger through a detailed Phase 2 process," the companies said yesterday.

They said they expect the CMA to issue a decision to refer to Phase 2 within the next fortnight.

The transaction will be cleared if that inquiry, which lasts up to 24 weeks, does not find it will reduce competition. If competition is affected, the CMA can seek remedies or block the deal.

A Tesco spokeswoman said it expected the deal to complete in January.

Some Tesco shareholders have criticised the deal, saying it was overpaying for the target and a distraction from its turnaround plan.

Booker supplies retailers including Budgens, restaurant chains including Wagamama and Carluccio's and operates cash and carry business Makro. (Reuters)

Irish Independent

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