The UK’s largest supermarket, Tesco has bought out Booker Group, owners of Budgens, Premier and Londis stores, for £3.7 billion.

Booker Group is the UK’s largest wholesaler, controlling the largest chain of cash and carries in the country, which supplies around 700,000 shops, pubs and caterers.

Tesco’s CEO Dave Lewis told the BBC he didn’t think the deal would face a challenge from competition authorities on Friday morning, though analysts have suggested regulators could become involved, as Tesco’s One Stop and Extra convenience stores compete with Booker’s small shops.

Even so, shares in Tesco jumped in response to the announcement on Friday, which indicates a reversal of fortunes for the retailer, which has been losing market share to discount supermarkets.  

Dave Lewis said Tesco is successfully turning its supermarket business around, and added of the merger, "Wherever food is prepared and eaten - 'in home' or 'out of home' - we will meet this opportunity with the widest choice and best service available.”

If it goes ahead, the takeover will mean that Tesco not only dominates the supermarket sector, but would also supply thousands of independent companies. Once a merger is completed, Booker shareholders will own 16% of the combined Tesco-Booker business.