UK: Iceland in £373m Booker takeover
Supermarket chain Iceland has agreed a £373.5m takeover bid for grocery wholesaler Booker. The merged group will be 61.1% owned by Iceland and will have combined annual sales of £5.5bn ($8.1bn). The deal, which will cost £20m to implement, is expected to generate cost savings of not less than £50m in the first year. The new group will look at combining Iceland's home shopping with Booker warehouses to take advantage of e-commerce opportunities. Malcolm Walker, chairman and chief executive of Iceland, said: "This merger will bring together two complementary businesses. "We share a common commitment to meeting the changing needs of our customers, and in particular to playing leading roles in the development of e-commerce." "Our assets and strategies are totally complementary, and this merger is a unique opportunity to deliver value both by realising substantial synergies and cost savings, and by driving top line growth." Booker also today released its year-end results, which showed a rise in pre-tax profit before exceptionals to £35.4m. This compares with profits of £3.6m in the previous period - which covered 15 months due to the change of the group's year end. Shares in Booker surged 15% on news of the deal, while Iceland shares eased 0.7%. "Booker's been in a mess for a while and this deal is seen as a life-saver. This means that Booker shareholders will now be Iceland shareholders instead, and that's good news for them," said one senior equity salesman.
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