Tesco's £3.7 billion takeover of Booker gets shareholder approval
Tesco has been given the green light for its £3.7 billion takeover of wholesaler Booker after investors in both firms approved the deal.
Shareholders in Tesco and Booker voted it through at separate meetings on Wednesday, despite rumblings of discontent from some of the wholesaler's investors.
It paves the way for the creation of the UK's largest food business and will be seen as a victory for Tesco boss Dave Lewis.
A total of 85% of Tesco shareholders cast ballots in favour of the deal, while 83% of Booker investors gave their seal of approval.
Tesco required 50% of investors to back the combination, while the threshold for Booker was set higher at 75%.
Mr Lewis 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."
The tie up has received a mixed reception, with some Booker shareholders including Sandell claiming that Tesco's offer undervalues the Londis and Budgens owner.
Cost savings as a result of the deal are expected to total £200 million.
Tesco, which is undergoing a turnaround under Mr Lewis, got approval for the takeover from the competition watchdog in December.
Tesco shares were up nearly 3% in afternoon trading, while Booker shares rose 2.5%.
Bruno Monteyne, analyst at Bernstein, said: "Tesco dominates the £110 billion in-home food market and Tesco-Booker has the assets to dominate wholesale supply of the £85 billion out-of home food market.
"The opportunities to improve and innovate in range, pricing, geographic reach and service to Booker customers are impressive."