By Ian Walker

LONDON-- Tesco PLC, the U.K.'s number one grocer by market share, has agreed to buy food wholesaler Booker Group PLC for GBP3.7 billion ($4.66 billion).

The supermarket chain also said Friday that it plans to restart paying dividends in fiscal 2018, reflecting the company's improved performance. It last paid a dividend in December 2014.

Tesco said the cash-and-share deal for Booker would benefit its customers and staff as well as generate value for shareholders. The companies expect to achieve pretax profit synergies of at least GBP200 million a year by the third year of completion andrevenue synergies of at least GBP25 million a year.

Booker shareholders will get 0.861 new Tesco shares and 42.6 pence in cash for each share held, giving them about a 16% share of the combined group.

Booker Chief Executive Charles Wilson and Chairman Stewart Gilliland will join the combined company's board after the deal.

Write to Ian Walker at

(END) Dow Jones Newswires

January 27, 2017 02:47 ET (07:47 GMT)

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