Britain's biggest retailer Tesco agreed Friday to buy wholesaler Booker for £3.7 billion in a surprise play to become the nation's top food business, slash costs and take on German-owned discounters. The purchase, worth $4.7 billion or 4.4 billion euros, sent Tesco shares soaring and was hailed by analysts as a "crucial" moment for the supermarket giant and the broader retail sector.
Tesco, which has been troubled in recent years by an accounting scandal and fierce domestic competition from German discounters Aldi and Lidl, added Friday that it was seeking to "enhance" its growth prospects.
"Tesco has made significant progress in turning around our UK retail business," said Chief Executive Dave Lewis.
"This merger with Booker will further enhance Tesco's growth prospects by creating the UK's leading food business with combined expertise in retail, wholesale, supply chain and digital.
"Wherever food is prepared and eaten - in home or out of home - we will meet this opportunity with the widest choice and best service available."
Booker is the country's biggest cash-and-carry operator and sells goods to more than 503,000 customers - including grocers, pubs and restaurants.
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