CMA opens formal investigation into Tesco's acquisition of Booker

The Competition and Markets Authority has formally opened an investigation into Tesco's proposed acquisition of wholesaler Booker.

During the first phase of the investigation, which runs until 25 July, the CMA will assess whether the deal could reduce competition and choice for shoppers and other customers, such as stores currently supplied by Booker.

If the competition regulator finds that there is the potential for reduced competition, the deal will then be referred for an in-depth investigation lasting up to 24 weeks, unless Booker and Tesco can offer up proposals which address any of the concerns identified in the initial probe.

"Having ensured it has all the necessary information from the companies before opening the investigation, the CMA is now seeking views on the merger from all interested parties."

Tesco's proposed £3.7bn takeover of Booker was announced back in January. Tesco chief executive Dave Lewis said at the time that a deal would create "the UK's leading food business with combined expertise in retail, wholesale, supply chain and digital".

Booker's chief executive, meanwhile, said: "We believe that joining forces with Tesco offers the potential to bring major benefits to end consumers, our customers, suppliers, colleagues and shareholders."

At 1240 BST, Tesco shares were down 0.9% to 185.05p and Booker was off 1.1% to 200.40p.