Shareholders back Tesco's £3.7bn takeover of Booker

Shareholders have backed Tesco (Frankfurt: 852647 - news) 's takeover of Booker, Britain's largest wholesaler.

Investors in both companies met on Wednesday to have their say on the deal, which was valued at £3.7bn when it was agreed in January 2017 but was worth £3.95bn by the close of trading on Tuesday.

Provisional figures show that 83.4% of Booker investors approved the deal, well above the 75% needed to go ahead.

Earlier, 85.22% of Tesco shareholders voted for the takeover to proceed, with 14.78% of votes opposing it.

Tesco had needed 50% support from shareholders.

Dave Lewis, group chief executive of Tesco, said: "I'm delighted that the shareholders of both companies have supported the merger.

"This merger is about growth, bringing together our complementary retail and wholesale skills to create the UK's leading food business.

"This opens up new opportunities to provide food wherever it is prepared or eaten - 'in home' or 'out of home' - and will benefit our customers, suppliers, colleagues and shareholders."

The news comes just a few weeks after advisory firm Institutional Shareholder Services warned Booker investors against the deal, saying they would have "limited potential benefit" and that the transaction "does not warrant support at the current terms".

Sandell Asset Management, which holds a 1.75% stake in Booker, had also come out against the deal, wanting a higher offer from Tesco.

But, now that it has support from shareholders, the takeover is expected to complete on 5 March.

In November, the tie-up was given the go-ahead by the Competition and Markets Authority , which said that it had no competition concerns.

Tesco is the UK's largest grocery retailer by some margin, while Booker is the largest wholesaler - supplying many of Tesco's competitors.

But the CMA said it was clear the two firms did not currently compete head-to-head in most of their activities - such as supplying the catering sector, which accounts for 30% of Booker's business.