Rob Young
Business presenter

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Talks about this morning's £3.7bn deal for Booker started nearly a year ago, Tesco chief executive Dave Lewis told reporters.

He's known Charles Wilson - the Booker chief executive (who's on the left in this photo) - for a long time, he said.

"We were talking about strategic opportunities, and as we were doing that we said: 'Hey it could be bigger than that'," Mr Wilson chipped in on a call with journalists.

Mr Wilson, who was right-hand-man to former M&S boss Sir Stuart Rose, is set to join Tesco's executive team and its board upon completion of the deal.

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Along with the Booker deal, Tesco has said it will also resume paying its dividends next year.

"It's been a challenging couple of years for Tesco, but I'm pleased to say the turnaround is strongly underway, and we've shared with the City plans we have for the next three years which have been very well received so in that sense the Tesco business is in a good position."

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Upward pressure on prices from suppliers is "not a part of the rationale [for the deal] at all," says Tesco chief executive Dave Lewis.

"Inflationary pressure is there, that's for sure, but it has nothing to do in playing into the reason for this deal. This deal is all about looking at the UK market, looking at customers, and how it is they want to consumer, and be involved in food, and we believe that by coming together in the way that we're announcing today we can serve those shoppers a little better," he says.

Image source, Booker Group

Chances are you've bought food from Booker in the UK, even if you weren't aware of it. 

It's the UK's largest cash and carry operator, selling everything from baked beans to PG Tips to 700,000 small businesses, including convenience stores, grocers and pubs.

A whole range of well-known restaurant chains, such as Wagamama, Prezzo and Byron Burger, use food supplied by Booker. 

And on the High Street, it owns the Premier, Budgens and Londis convenience-store brands, although the stores themselves are operated by franchisees.

In total, profits for the group were £127.8m in the year ending 27 March 2016.

Analyst Louise Cooper tweets:

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What will Tesco have to do to satisfy UK competition authorities about a tie-up between the UK's biggest supermarket chain and a major food wholesaler, Tesco chief executive Dave Lewis is asked?

"We'll have to make sure the merger is cleared through all of the authorities as usual, but the one thing I would stress... this is not a case of Tesco buying any more stores, so we actually don't see there to be an issue in terms of competition, but we obviously cooperate fully as we go through the normal clearing process of a deal like this," he says.

Booker owns grocery chains Budgens, Londis and Premier.

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Tesco will supply other retailers and restaurants after the Booker deal - its rivals.

"Booker have a fantastic business, and have built a fantastic business by serving their customers very well indeed, and we hope that by coming together we'll be able to provide those customers, some of which are independent retailers, with a better range and better value," says Tesco chief executive Dave Lewis.  

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Image source, Reuters

Tesco is the UK's biggest supermarket chain, and Booker is the largest cash and carry. Tesco is five times the size of Booker, so this is a takeover, right?

Not according to Tesco chief executive Dave Lewis: "It really is a merger... because what we're doing is bringing together two very complementary businesses which have a focus on food and a focus on customers, and it's all about thinking about how it is we can serve the UK food market together better," he says.

He added that the deal is not about cutting costs in Tesco's supply chain, but about "looking at the food market completely differently".

Image source, EPA

Gavin Patterson, BT's chief executive, said in BT's third quarter results, external that he was "deeply disappointed" about a scandal uncovered in the firm's Italian business.

Earlier this week the firm wrote down its Italian unit by £530m after years of "inappropriate behaviour" which had resulted in the overstatement of earnings.

The profit warning on Tuesday wiped out a fifth of BT's market value.  

BT said it had added 83,000 broadband customers in its third quarter, while 260,000 switched to faster fibre connections.

BT's head of continental Europe, Corrado Sciolla, is leaving the company after it revealed an accounting scandal at its Italian operation, news agency Reuters reports.

"Corrado is leaving the business, this happened on his watch," Reuters reported BT as saying.

Earlier this week BBC business editor Simon Jack said Mr Sciolla would leave BT.

Leading retail analyst Nick Bubb tweets:

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Tesco said the deal to buy Booker, which values the wholesaler at £3.7bn, will help it to serve the UK food market.

"This merger with Booker will further enhance Tesco's growth prospects by creating the UK's leading food business with combined expertise in retail, wholesale, supply chain and digital," said Dave Lewis, chief executive of Tesco.

Tesco has announced a £3.7bn deal to buy UK food wholesaler Booker in a deal it says will create the "UK's leading food business". 

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Yesterday Donald Trump talked about a 30-day termination clause in trade deals. Could this lead to a bad deal for the UK?

Shanker Singham of Legatum Institute says: "It's not unusual at this point in any trade negotiation, prior to having actually started the negotiation, you potentially see... a lot of grandstanding and a lot of position taking and opening gambits and so forth... I think it's an opening position." 

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Theresa May and Donald Trump are going to try to prepare the ground for a UK/US trade deal later in the day.

What might such a deal look like? Will the US have the upper hand? Shanker Singham of think tank Legatum Institute, says: "[In] a good trade deal, both sides actually win. It's non-zero-sum growth is what we're after, and that is ultimately what decides whether a deal happens or not."

(A zero-sum game is one where what one side gains another loses).

Mr Singham continues: "The speed with which you can do a trade deal depends on the defensive interests of the parties concerned, and the political will, and I think what we've seen is a lot of political will on both sides... to do a comprehensive trade agreement."

Image source, Reuters

Toshiba shares were up by nearly 1%, outpacing the broader market where the Nikkei was up by 0.2%.

The Japanese conglomerate plans to split off its memory chips unit and sell a stake in the new business. Toshiba wants to raise funds after revealing a heavy one-off loss at its US nuclear power business. 

As for other regional markets - China is shut for Lunar New Year holiday and will resume trade on 3 February.  

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Many of the Asian stock markets were closed or had half-days ahead of the lunar new year tomorrow. 

Markets in China, South Korea, Taiwan were shut while Malaysia and Hong Kong were open only for the morning session. 

For those still trading, there was a holiday mood for investors ahead of celebrations for the "Year of the fire rooster", said BBC Asia Business Report presenter Rico Hizon.

After 2016 - which was the "Year of the monkey", full of mischief - the fire rooster brings a year of disruption, transformation and conflict, he told Wake Up to Money.

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Jim Farley, the boss of Ford Europe, has warned the fall in the value of the pound since the Brexit vote would be a significant challenge for the carmaker this year. 

He told Wake Up to Money that the drop could cost the firm as much as $600m.

Ford had "a lot of work to do in 2017 to offset the headwinds of sterling", he said.  

The pound has fallen about 16% against the dollar since the referendum.

Ford makes 2 million engines in the UK and employs 15,000 staff, half of them engineers working on products sold worldwide, he said.

"That's why the agreement between the UK and EU is so critical," he added. 

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Image source, BT

BT shocked the market on Tuesday, when it revealed an Italian accountancy scandal would cost it more than half a billion pounds and warned of a slowdown in its crucial business from the UK public sector.

It was "a collection of pieces of bad news, which begins to erode trust in management," says Percival Stanion, head of multi-asset strategies at Pictet Asset Management.

BT reports third quarter results this morning. "The clarity of the recovery plan revealed today will be key," Mr Stanion tells Wake Up to Money. 

"Investors will be looking for no further upwards revisions to this cost over the coming months. That would really be the nail in the coffin."