Renowned for its ‘every little helps’ slogan, Tesco has recently announced that it will be forking out a lot to take over wholesalers, Booker. The deal is estimated to be worth some £3.7 billion and is set to strengthen Tesco’s position in the food market.
Booker is the largest cash and carry operator in the UK and supplies a pretty significant amount of caterers in the UK, along with supplying well-known food brands such as Byron Burgers and Carluccios. The deal is expected to give Tesco the opportunity to expand on several fronts and serves as a good reminder to always be on the lookout for the next ‘move’ for your business.
Tesco’s deal with Booker opens avenues for the supermarket giants to supply thousands of independent convenience stores, as well as saving significant operating costs by consolidating distribution chains and exploring other opportunities to reduce costs. Getting into the catering supplies market could also prove useful, particularly with the surge in popularity of takeaway apps, making eating out easier and more popular than ever. Being up-to-date with the latest trends and being savvy about how to improve cost efficiency in constantly changing markets is vital to long-term success, but any major move requires a substantial amount of homework!
Multi-billion pound deals are most likely going to give competitors goosebumps, or at the very least, cause them to sit up and take note. However, Sainsburys, Asda and the like will not be the only ones taking interest in this deal. The Competition and Markets Authority is responsible for preventing and reducing ‘anti-competitive activities’ and will be perusing the terms of this deal with a watchful eye, particularly since Tesco already have a very sizeable share of the UK grocery market. That said, Tesco remain confident that the deal will get the get the green light since the deal would not mean that they own Booker’s stores and therefore they would not be able to control prices, since they are owned independently. Knowing your strengths and weaknesses in your current and future markets is a key consideration when looking to expand your business and ensuring long-term success
Booker currently controls the Premier, Londis and Budgens groups so the Tesco takeover is likely to create some interesting branding opportunities in the future for these rivals turned allies.
Looking at your branding strategy and ensuring it aligns with your business goals will help you communicate your business message to external parties. Reviewing branding strategies and business goals on a regular basis is vitally important, even more so when contemplating mergers, acquisitions or other similar transactions. Whether it be adding to a well-known brand or developing something innovative and fresh (off the back of a merger, for example), strong branding is essential to get people on board with your strategy, both inside and out of the business.
If you are thinking about taking your business to the next level, our corporate team are well versed in almost any transactions you can think of and can help guide you through the process. Unlike a traditional law firm, we don't charge by the hour and we won't charge for each phone call or email. Instead, all of our fees are fixed and agreed with you upfront.
By Louis Muncey
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