THE Co-operative Group has agreed a £1.56billion takeover of rival Somerfield.
The deal, which is subject to regulatory approval, will transform the Co-op into the UK’s fifth biggest food retailer, with sales of about £8billion and a market share of about 8%. It will also have more than 3,000 outlets.
Chief executive Peter Marks said the acquisition would provide “rocket fuel” for the group’s growth plans.
The Co-op currently has food stores in Whitby and Overpool, and will now own the Somerfield store in Hope Farm Road, Great Sutton.
There is the possibility that the Co-op may be told by competition watchdogs to sell some of the stores it has purchased.
Mr Marks said: “This is good news for consumers and for competition in the grocery market, where we will create a stronger fifth player in food and a convenience store chain with unrivalled geographic reach.
“Together, The Co-operative and Somerfield colleagues will be better placed than ever before to provide consumers with great choice, value and service.
“Given a deal of this nature, there are likely to be some local competition issues. We are confident we will be able to work through these with the Office of Fair Trading.”
Somerfield chief executive Paul Mason said: “The Co-operative Group and Somerfield have a similar focus in terms of customers, store types, product ranges and business vision.
“Our shared vision of providing a high-quality and affordable convenience offer to local communities means that together we will be twice as strong, and therefore twice as able to deliver the local grocery shops British customers demand.”
General secretary of shopworkers’ union Usdaw, John Hannett, said: “Usdaw welcomes the planned acquisition of Somerfield by the Co-operative Group.
“We represent members in both companies and look forward to playing a full part in the discussions on the process of integration.
“The Co-operative Group is a progressive employer, which endorses the consultation and negotiation process with Usdaw as being the best way of ensuring that its employees are given a fair, safe workplace and a real voice at work.”