CASH-AND-CARRY giant Booker moved to buy struggling rival Makro in a deal expected to add more than a million customers to its books.
Booker, which has a depot at Leeds Road, Deighton, and 172 branches UK-wide – mainly supplying caterers and local shops – said the planned acquisition of German-owned Makro UK will give it a larger slice of the market for small and medium-sized businesses.
Makro UK, which has been valued at £139.7m, was founded in 1971 in Eccles, Manchester, and has 1.1m customers. It generated sales of about £800m in 2011.
Makro’s German parent Metro – the world’s fourth biggest retailer – will get a near-10% stake in Booker, valued at about £123.9m, under the deal.
There are 30 Makro sites in the UK, but the business has under-performed for several years and made losses of £63.2m last year as it struggled amid fierce competition in the wholesale sector.
The deal, which needs shareholder approval, marks another step in the turnaround of Booker under former M&S director Charles Wilson.
Since taking over the company in 2005, he has returned it to profit and overseen the acquisition of smaller wholesalers Blueheath, Ritter Courivaud and Classic Drinks.
Mr Wilson said: “Through working together, Booker and Makro UK will improve choice, prices and service for retailers, caterers and SMEs throughout the UK.”
Booker has some 10,000 staff and nearly half a million customers. It owns its own retail fascia, the yellow Premier brand, which is used by some 2,500 independent retailers.
Its shares closed 7.9p ahead at 87p.
Nicola Mallard, an analyst at Investec, said: “This looks like an excellent deal for Booker.
“It has proved it can turn struggling cash and carry businesses around and with another £800m on the top line, this will produce a stronger business with enhanced growth prospects.”
Booker will also enter into a strategic partnership agreement with Metro as a result of the deal, which is expected to help it take advantage of the German giant’s buying power overseas.
Olaf Koch, chairman of the management board of Metro Group, said Booker was the right buyer for its UK business, which has shown “unsatisfying performance”.
He added: “We are convinced that this new set-up meets all requirements for future success in the UK, while allowing Metro Group to further concentrate on countries within our strategic focus.”
