The Co-operative Group (Co-op) is buying rival Somerfield for £1.57bn.
The Co-Op has a mutual structure with 2.5 million members. It has more than 4,300 UK retail outlets, and employs 85,000 people
Somerfield has 880 stores. It generated net sales of £4.2 billion in the year to April, with underlying earnings of £233 million.
Somerfield is owned by a consortium that includes private equity firm Apex, Barclays Capital and property magnate Robert Tchenguiz. They bought the chain for about £1.1bn three years ago.
Co-op chief executive Peter Marks said that the acquisition would provide "rocket fuel" for the group's growth plans.
He added that the deal, which is subject to regulatory approval, would be good news for consumers and for competition in the grocery market.
As well as currently being the UK's fifth largest food retailer, the Co-Op is the third largest pharmaceuticals chain, the biggest provider of funeral services and the largest independent travel business in the country.
Supermarket share
- Tesco: 31.2%
- Asda: 16.8%
- Sainsbury's: 15.9%
- Morrisons: 11.4%
- Total Co-ops: 4.2%
- Waitrose: 3.9%
- Somerfield: 3.7%
- Aldi: 2.9%
- Lidl: 2.3%
- Iceland: 1.7%
- Netto: 0.6%
- Farm Foods: 0.5%
Source: TNS
