The food retail sector has seen significant merger and acquisition activity this week.
Tesco’s merger with Booker received provisional approval from the Competition and Markets Authority yesterday, which followed Nisa Retail’s approval of a £137.5m takeover bid from Co-Op Food on 13 Nov.
A combined Tesco and Booker would have about 7,700 stores across England, Wales and Scotland – more than twice the combined number of Nisa and Co-Op Food stores, according to figures from Colliers International and LDC.
The merger would also benefit Tesco’s geographical spread.
Although the North East is home to just 3% of Tesco’s stores, it represents 6% of Booker’s portfolio.
By contrast, 18% of Tesco’s stores are in Greater London, compared to just 8% of Booker’s.
Nisa and Co-Op are even more complementary: more than 41% of Co-Op stores are located in Scotland, the South West and the South East – areas with relatively little Nisa exposure – while 39% of Nisa’s portfolio is spread between the East of England, the West Midlands and Greater London.
A final decision on the Tesco-Booker merger is expected at the end of December. The deal also requires 50% approval from Tesco shareholders and 75% approval from Booker shareholders.
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