UK food wholesaler Booker is set to buy the local cash-and-carry assets of German retail giant Metro Group.

Booker said today (30 May) it had agreed a cash-and-shares deal that values Metro’s Makro UK arm at GBP139.7m. As part of the agreement, Metro will acquire just under a 10% stake in Booker, a holding that is valued at GBP123.9m. Booker will also pay GBP15.8m in cash to complete the deal.

The two companies have also agreed to form a “strategic partnership agreement” to “facilitate competence sharing”.

The sale, which remains subject to the approval of Booker shareholders, would see Metro exit what has become a challenging market for the world’s fourth-largest retailer.

Speculation has swirled over the last couple of years that Metro has been looking to sell the business. Last June, Metro replaced four senior directors at Makro UK with consultants amid differences over the wholesaler’s strategy.

Booker said it was looking to become “the UK’s leading wholesaler to caterers, retailers and small and medium sized enterprises”.

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It said it would be acquiring 30 “purpose built sites”, which serve 1m customers, largely SMEs, which it added “complements” its focus on catering and retail customers.

Booker chief executive Charles Wilson said: “Through working together, Booker and Makro UK will improve choice, prices and service for retailers, caterers and SMEs throughout the UK. Together we will offer a wide range of foods and non-foods to our professional customers, via the internet, delivery and cash and carry. The Board is confident that this collaboration will enable us to continue to generate value for shareholders.”

The deal comes seven months after Metro chief executive Olaf Koch took charge of the German retailer. He said Booker was the “right buyer for our challenging UK business”, which had “shown an unsatisfying performance”.

Koch said: “Booker is very well positioned in the UK market, with a great brand perception and vast experience in managing product ranges and in customer services. Therefore we are convinced that this new setup meets all requirements for future success in the UK, while allowing Metro Group to further concentrate on countries within our strategic focus.”

Click here for the full statement from Booker and click here for comment from Metro on the deal.