Booker awaits OFT go-ahead for Makro deal
BOOKER, the cash and carry operator which agreed a deal to buy ailing North West rival Makro in the summer, says it is hoping for a decision on whether the deal can go ahead, in the next few weeks.
The listed group, which unlike Eccles-based Makro, is profitable, said it has identified £26m in synergies which it will be able to deliver if the Office of Fair Trading give the £140m deal the thumbs-up.
Until regulatory approval is gained Booker has to hold Makro as an investment, rather than start the integration process.
Announcing its half-year results Northamptonshire-based Booker said it expects Makro, which trades from 30 sites and was previously owned by German group Metro, to make an operating loss of £18m this calendar year.
Its like-for-like sales for the year ended December 2012 will be down by 9.1% to around £715m.
Booker said: “We are expecting the OFT to issue its decision towards the end of October or in early November 2012.
“If the matter is referred to the Competition Commission, its review would take approximately six months and we will be required to continue to hold Makro separate during this period.
It said that if is able to complete the deal from January 1, it expects a trading loss to be incurred by Makro of approximately £10m in the three months to March 2013, as the first quarter of the year as it is Makro’s most unprofitable quarter due to low sales and, in particular, low sales of non food.
After this point, and when cost-savings kick in, Booker expects synergy benefits will arise of approximately £26m and then the Makro deal will boost group operating profit by around £10m in the year to March 2014.
Bookers results – excluding Makro – showed a 3.3% increase in sales to £1.9bn in the 24 weeks to September 14 and profits rising 13.3% to £51m.
Chief executive Charles Wilson said: “Subject to competition clearance Booker and Makro will be able to improve choice, prices and service for caterers, retailers and small businesses in the UK. Once integrated, Makro will prove a good addition to the Booker Group.”
