Competition watchdogs have given the go-ahead to The Co-operative’s takeover of Somerfield.
The £1.6 billion move will cement The Co-op’s place as the UK’s fifth-biggest supermarket chain.
However, the Office of Fair Trading (OFT) has stipulated that The Co-op will have to offload at least 126 stores as part of the acquisition.
The acquisition will give The Co-op sales of some £8bn and a market share of around eight per cent.
The OFT said the merger would be “pro-competitive” for the UK supermarket sector, once the store disposals were agreed.
Chief executive John Fingleton said: "Once finalised, the divestment package will directly safeguard the welfare of many thousands, if not millions, of UK consumers by restoring grocery competition in the 126 local areas affected, while allowing an otherwise likely pro-competitive merger to go ahead."
The watchdog found no issues at a national level and said the merged firm would be stronger against the big four and, said Fingleton, "would not increase the risk of coordination between large grocery retailers".
Some 40,000 consumers were interviewed in the research, a record for any merger case. The store disposal package is also due to set records, as it looks set to be the biggest ever in UK competition and merger history.
The Co-op welcomed the announcement. “This is good news for consumers and good for competition,” a statement said.
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