Food wholesaler Booker and supermarket giant Tesco will merge in a £3.7bn deal.

The merge aims to benefit caterers and small businesses and should enable the wholesaler to improve its range, pricing, product quality and delivery capabilities.

Speaking on a conference call today, Booker said it hoped the merger would help small businesses prosper, in an environment where the industry faces rates increases and chef shortages.

It also said combining its fleet of delivery vans would help foodservice operators organise top-up deliveries, and that the merger would improve its digital service.

Commenting on today's announcement, Charles Wilson, chief executive officer of Booker said: "Booker is committed to improving choice, prices and service for the independent retailers, caterers and small businesses that we are proud to serve.

“We believe that joining forces with Tesco offers the potential to bring major benefits to end consumers, our customers, suppliers, colleagues and shareholders."

It is not yet clear whether the Competition and Markets Authorities (CMA) will challenge the deal.