Coop agrees to buy Somerfield

The Co-operative Group has agreed to purchase UK grocery retailer Somerfield for £1.565bn (€ 1.97 bn) ending months of speculation about who would buy Britain's seventh largest grocery chain.

Somerfield operates around 880 outlets across the UK.  The deal will give the Co-op group more than 3,000 stores and net sales of about £8bn (€10bn).

Not only will this make it the fifth largest food retailer in the UK with a market share of about eight per cent it will also make the Co-op Group the market leader in the convenience food retail sector.

The Co-operative Group and Somerfield both have a similar focus in terms of customers, store types, product ranges and business vision, being particularly active in local communities.

"The acquisition of Somerfield will provide the rocket fuel for our three-year growth plan outlined in April of this year. Under this plan we are revitalising our retail estate under a single unified brand," said Peter Marks, Chief Executive of The Co-operative Group.

The transaction is subject to regulatory approval and it may lead to the closure of some stores.
Somerfield was bought in 2005 by its private equity owners - a consortium of Apax Partners, Barclays Capital, Robert Tchenguiz, the property tycoon, and Kaupthing,  the Icelandic bank –  for £1.2bn (€1.5bn) including debt.