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UK regulator approves Tesco's planned £3.7 billion purchase of Booker

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UK regulator approves Tesco's planned £3.7 billion purchase of Booker

The U.K.'s competition regulator on Dec. 20 cleared Tesco Plc's proposed £3.7 billion acquisition of Booker Group Plc after an in-depth review.

Members of the Competition and Markets Authority, or CMA, concluded that Tesco, a retailer, and Booker, a wholesaler, "do not compete head-to-head in most of their activities."

The watchdog also conducted surveys and reviews for long-term effects of the deal. The CMA had given the deal provisional approval in November 2017 but invited further comment before issuing its final decision.

The CMA surveyed hundreds of retailers and found that retailers typically use more than one wholesaler to supply their needs. It found no evidence that the merger would eliminate competition. Booker does not own any retail stores and cannot dictate the competitive plans and prices of retailers, the CMA said.

"We have carefully listened to feedback from retailers and wholesalers who operate in what are highly competitive U.K. retail and wholesale sectors," the CMA's inquiry group chair, Simon Polito, said in a statement. "Retailers have told us that they shop around for the best prices and service from their wholesaler, and we are confident that this will continue after Tesco buys Booker."

The CMA said the merger could intensify competition in the wholesale market, leading to cheaper prices.

In a statement, Tesco welcomed the announcement by the CMA. The U.K.'s largest supermarket operator by revenue said it expected shareholder meetings to take place toward the end of February 2018 and the deal to be complete in March.