The supermarket giant is the biggest winner on the FTSE 100 at lunchtime, having risen more than 9% after news of its £3.7bn deal for wholesaler Booker.

Also giving Tesco shares a boost was the supermarket's promise to restart its dividend next year, said Nicholas Hyett, an equity analyst at Hargreaves Lansdown.

Tesco's gains were propping up the FTSE - which was flat at 7,160 points.

Among the main fallers were drugmaker Astra Zeneca and budget airline Easyjet after analysts warned about rising competition in their respective markets.

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The football transfer window closes next Tuesday, and spending is ahead of last year, according to the Deloitte’s Sports Business Group. 

As of this morning, total Premier League spending in this month's window stood at about £120m, compared with £90m at the same stage last year.

Brazilian midfielder Oscar has been the most expensive signing - an estimated £60m from Chelsea to Shanghai SIPG - as the interest from cash-rich Chinese clubs in Premier League players intensified.

Total spending for this season - including transfers done in the summer - currently stands at a record £1.285bn, surpassing last year's total of £1.045 billion, Deloitte said.  

The US is the UK’s biggest export market by country, with $50bn worth of goods being sent across the Atlantic every year.

According to the Institute of Export & International Trade, pharmaceuticals is the top export to the US, with $11.9bn being traded in 2015. Machinery ($11.1bn) and vehicles ($8.3bn) were the second and third biggest exports.

Collector items, art and antiques was fifth on the list with $4.3bn being exported to the US every year.

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Mexico has condemned a US suggestion that it may impose a 20% tax on Mexican imports to pay for President Donald Trump's planned border wall.

It's sparked a diplomatic row between Trump and Mexican president Enrique Pena Nieto - seen above meeting before the election.

It's also caused concern among some senior Republicans. Senator Lindsey Graham warned that US consumers may wind up bearing the cost of the proposed tax:  

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Japan's Consumer Affairs Agency has fined Mitsubishi Motors 480 million yen (£3.3m) over false advertising about fuel efficiency.

The watchdog said that catalogues and websites for certain Mitsubishi cars sold in Japan misrepresented how many miles the vehicles could do.

The fine covers models including the eK wagon minicar, the similar Dayz model produced for Nissan, and the Outlander SUV. 

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German prosecutors have said they believe the former Volkswagen chief executive, Martin Winterkorn, knew of emissions cheating software earlier than he claims, according to reports.

Prosecutors near VW's Wolfsburg base said 28 homes and offices were also searched this week in connection with an investigation into the carmaker, Reuters reported. 

Earlier this month, Mr Winterkorn denied having early knowledge of the software violations in a German parliamentary committee hearing.  

VW has said its executive board did not learn of the software violations until late August 2015 and formally reported the cheating to US authorities in early September that year. 

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Tesco's £3.7bn deal for Booker gives it an opportunity to sell its own-brand ranges into the convenience stores Booker supplies, says Patrick O’Brien, Content Director at Verdict Retail.

That could help it to "weaken the power of the big brand suppliers such as Unilever which it had a public spat with over price rises last year," he adds.

He goes on to say: "The challenge for Tesco is in convincing the regulators that the ownership structure of Booker’s symbol group stores means that competition is not compromised, and persuading the owners of the independent convenience stores that being supplied by their largest competitor will be beneficial to them."

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Tesco chief executive Dave Lewis says the Booker deal is about people shopping for food to eat at home, but also food bought "to eat on the go".

"There's a large market for food which is consumed at home, which is where retail is normally the primary service," Mr Lewis said. "But there's also an increasing amount of food which is consumed outside of the home and on the go and that's where Booker have a real expertise, so this is about giving customers what they tell us they want..."

Among the many companies Booker supplies are restaurant chains, including Carluccios, Byron and Prezzo. 

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The deal between UK supermarket chain Tesco and wholesaler Booker is a "bold new direction" for the retailer, according to Hargreaves Lansdown analyst Laith Khalaf.

"The deal with Booker shows Tesco is not going to sit on its hands and wait for its dominant market position to slowly leak away to competitors," he says.

The UK’s supermarkets are engaged in new strategies to cope with the brave new world [of online and convenience store shopping]... Sainsbury bought Argos, Morrisons is flirting with Amazon, and now Tesco has revealed its plans to drive further growth."

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James Lowman is chief executive of the Association of Convenience Stores, whose members include stores operating under Booker-owned franchises Budgens, Premier and Londis.

He's told Radio 5 live that Tesco and Booker might have a tough task selling the merger to those stores, many of which have been battling Tesco for decades and instead would be supplied by them.

"On one hand that consolidation could see some benefits in terms of buying prices, distribution efficiencies and those sort of things," he said. 

"Some of them might feel it goes against their independence heritage and it's up to Tesco and Booker to persuade them it's in their interest."

Interesting footnote: the association also has One Stop as a member, which is owned by Tesco.

The chief executives of Tesco and Booker both said on a call with reporters that they plan to merge the two companies without cutting jobs.

They reckon they'll get benefits of £25m and cost savings of £175m from combining the two companies.

But that would not be driven by a reduction in the number of roles, Tesco boss Dave Lewis said.

Charles Wilson, head of Booker, which has 13,000 workers, added that they hoped to "keep the expertise" in both firms.

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A UK supermarket executive has told me he has concerns about the Tesco-Booker tie-up, pointing out Tesco and Booker are both big in convenience stores. He says this raises competition issues. 

The Competition and Markets Authority “may not like the idea of one company’s products in so many convenience stores”.

This person also says this merger could prove “very distracting” for Tesco when it’s only “half way through” its recovery plan.    

The Competition and Markets Authority (CMA) had this to say about the Tesco and Booker tie-up:

"We do not comment on potential investigations," a CMA spokesman said.

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Booker is a major supplier to independent convenience stores across the UK.

Its chief executive Charles Wilson was asked on a media call with reporters how shopkeepers might feel about buying their products from Tesco - in many cases a direct rival - if the supermarket chain acquires Booker? 

"It'll take a bit of persuasion," he condeded.

However, corner shops face many other challenges, including business rates and the living wage, and so want to get the best out of their suppliers, he said.

"In five years' time I think they'll be saying it's a good deal for them," he added.

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The UK's biggest supermarket group, Tesco, has agreed to buy UK’s biggest food wholesaler, Booker Group, in a £3.7bn deal.

Tesco's chief executive Dave Lewis says the two businesses have a complementary set of skills and he sees the merger as "low-risk" and something which will "enhance choice, quality and value".

The chief executives of Tesco and Booker appeared to be quite sanguine about any possible competition concerns about a tie-up between the UK's largest supermarket chain and a major wholesaler.

However, independent retail analyst Nick Bubb, said:

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As well as its supplier business, Booker also owns the Londis, Premier, Family Shopper and Budgens convenience store brands, which have thousands of shops.

So, how will Tesco satisfy potential concerns from UK competition regulators, its boss Dave Lewis was asked by reporters?

Booker doesn't own the stores themselves - they are run as franchises, he said. 

A Booker-Tesco combination won't have influence over key aspects of how the shops are run, including pricing, he claimed.

"We're very confident that competition regulators will come to the same view," Mr Lewis added.

The FTSE 100 is in positive territory - just - in part thanks to a 10% boost to Tesco's share price.

Tesco has announced a deal with Booker which values the business at £3.7bn.

The FTSE 100 is up 0.05% at 7,164.76 points.

Other top risers are International Airlines Group, Sage Group, Old Mutual and Whitbread.