German owner sells loss-making Makro to Booker
THE German parent company of Eccles-based wholesaler Makro has decided to cut its losses after a series of poor results and sell the business to competitor Booker for £139.7m.
Booker, which is based in Northamptonshire, is paying £15.8m in cash for the business and issuing new shares equivalent to around 10% of the enlarged business, which equates to £123.9m on yesterday’s closing price of 79.1p per share.
The Makro business has been the centre of much disharmony in recent years, undergoing several rounds of restructuring and the replacement of most of its management team last year. It has also incurred heavy losses over the past three years, and in the year to December 31 declared a pre-tax loss of £63.2bn on sales of £787.4m. The firm also had gross assets of £348.7m at its year end.
However, Booker has said that the proposed deal would allow it to become “the UK’s leading wholesaler to caterers, retailers and small and medium-sized enterprises, with a wide range of food and non-food via the internet, delivery and cash and carry”.
“The combination of the two businesses will enable Booker and Makro UK to further improve choice, prices and service for all customers,” it said.
Booker is the considerably larger company of the pair, with sales to March 31 of £3.9bn and 172 cash and carry branches around the UK, compared with Makro’s 30 – most of which it owns either as freehold sites or on a long leasehold. Makro also currently employs 3,000 staff, compared with 10,000 working at Booker.
Booker has said the pair will enter into “a strategic partnership agreement which will enable competence sharing for mutual benefit”.
Booker’s chief executive Charles Wilson said: “Through working together, Booker and Makro UK will improve choice, prices and service.
“The board is confident that this collaboration will enable us to continue to generate value for shareholders.”
The chairman of Makro’s German parent group, Metro AG, Olaf Koch, said: “In Booker, we have found the right buyer for our challenging UK business, which has shown an unsatisfying performance.
“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.”
