The FTSE 100 was pulled higher by Tesco shares which soared after announcing a £3.7 billion merger with Britain's largest wholesaler.
Tesco was the biggest riser on London's blue chip index, up 17.55p to 206.55p, while wholesaler Booker topped the FTSE 250, up 29.2p at 212.3p.
It helped the FTSE 100 end the day up 0.3% or 23 points at 7,184.49.
The grocery giant said the tie-up with Booker - which also owns Londis and Budgens convenience store brands - will create "the UK's leading food business" and would result in total savings of £200 million.
The merger was clinched under chief executive David Lewis, who has been hailed for beginning to turn Tesco around after the disastrous reign of his predecessor, Philip Clarke - which saw profits slide, market share eroded and an accounting scandal dog the supermarket giant.
Michael Hewson, chief market analyst at CMC Markets UK said the deal "will not only help the company drive down costs in the supply chain but also open up a host of new 'Metro' type stores that seem to be the hallmark of the new food retail market these days.
"It will inevitably raise competition concerns amongst its rivals given that Tesco already has 28% of the grocery retail market, and as such will give it even more pricing power."
In currencies, sterling continued to retreat from the six-weeks high hit earlier in the week.
The pound weakened 0.5% against the US dollar to 1.252, and 0.6% versus the euro to 1.171.
Across Europe, the French Cac 40 and German Dax fell 0.6% and 0.3%, respectively.
In oil markets, Brent crude slumped 1.1% to 55.51 US dollars per barrel (£44.30) as investors faced renewed fears about rising US production that could offset the price supportive effects of Opec supply cuts.
In UK stocks, BT shares rose 0.7p to 302.8p after major losses earlier this week.
The telecoms giant reported a 37% plunge in third-quarter profit to £526 million after taking a hit from the accounting scandal at its Italian division.
The telecoms giant said on Tuesday that it will book a £530 million writedown linked to "inappropriate behaviour" in Italy, up from a previous estimate of £145 million.
BT has shed more than 20% of its share value since the extent of the scandal was announced.
The biggest risers on the FTSE 100 were Tesco up 17.55p to 206.55p, Fresnillo up 56p to 1,428p, Severn Trent up 55p to 2,262p, and Randgold Resources up 160p to 6,580p.
The biggest fallers on the FTSE 100 were Pearson down 15p to 607p, easyJet down 21p to 974p, Antofagasta down 14.5p to 822.5p, and Land Securities Group down 14p to 992p.