Supermarket Tesco announced today a deal to merge with Booker, the UK's largest wholesale food retailer.
The firms said the deal would create the 'UK's leading food business'.
Booker Group is the UK's largest cash and carry operator, and supplies everything from baked beans to teabags to 700,000 convenience stores, grocers, pubs and restaurants.
In a joint statement, the two companies said that the combined group would bring benefits for consumers, independent retailers, caterers, small businesses, suppliers, and colleagues, and deliver 'significant value to shareholders'.
"This merger will further enhance Tesco's growth prospects by creating the UK's leading food business with combined expertise in retail, wholesale, supply chain and digital," the chief executive of Tesco, Dave Lewis, said.
But the deal will raise questions over its impact on the UK’s grocery sector and is likely to be scrutinised closely by competition authorities.
Speaking to the BBC's Today programme, Mr Lewis said he believed the transaction would not face a challenge from competition authorities, as it would not result in Tesco owning any more stores, and he dubbed it a "low risk" merger.
Booker CEO Charles Wilson said in a statement: "Booker is committed to improving choice, prices and service for the independent retailers, caterers and small businesses that we are proud to serve.
"We believe that joining forces with Tesco offers the potential to bring major benefits to end consumers, our customers, suppliers, colleagues and shareholders."
