Tesco says everyone wins with £3.7bn Booker buy. That's open to debate

CEO David Lewis is declaring that Tesco is back with his first big deal

Tesco boss David Lewis shakes on deal to buy food wholesaler Booker (Reuters)

Wow! I’m excited! So should you be. Why? The bringing together of Tesco with food wholesaler Booker is going to “delight consumers”.

Yes, Tesco actually used that phrase. Apparently we’re going to be see “better availability of quality food at attractive prices across retail and eating out locations”. Super!

It’s also great news for independent retailers. No, really. It will help them, caterers and small businesses by “further improving choice, price and service, with enhanced digital and delivery service options”.

There is, in fact, something for everyone in the merger announcement. Green lobby? Tick. The deal will, we are told, reduce waste. Suppliers? Tick. It will present a “broader market opportunity” whatever that means.

And at the bottom of the announcement, consumers are there again. As well as delighting us the merger will “create attractive innovation opportunities” to serve us.

Mustn’t forget shareholders. They get synergies and some blah about Tesco retaining market leading retail and wholesale expertise. Tick!

Yep, this £3.7bn cash and share deal is a win, win, win! And Tesco is trying very hard to make you believe it.

Analysts and retail experts certainly seem to quite like it, hailing it as a “game changer” in UK food.

Shareholders also seem pleased, although the 10 per cent jump in the share price had a lot to do with the company’s promise to start paying dividends again.

But not everyone is so cheerful.

Tesco CEO David Lewis has publicly stated that he doesn’t expect many issues with the Competition & Markets Authority, even though the addition of the franchise operators that run outlets in Booker's Londis, Budgens and Premier store chains, will give his company unprecedented influence and clout within the convenience store sector.

But the excitable talk of a win win for every group imaginable in Tesco’s announcement suggests the company sees the potential for trouble ahead. It indicates that the group wants to get on the front foot because while the stockmarket might love the deal, other stakeholders are less pleased.

The British Independent Retailers Association says the takeover "must raise concerns amongst independents and, hopefully, the competition authorities" given the power the new organisation will have. It fears any short-term gain from the deal won't last and consumers may ultimately suffer along with its members. The Association of Convenience Stores is more equivocal. It says some retailers might welcome the news. But it concedes that others will feel “uneasy”.

Of course, this is a bright, shiny, new Tesco under a new regime. One that has revived a slumbering giant.

Tesco isn’t quite through the woods of its past but Mr Lewis appears to feel that it's far enough along that he can flex his muscles.

The supermarket that ate Britain is over its indigestion and at the table once more. Smaller retailers are anything but delighted and the ranks of critics may grow over time.