The Co-operative Group is expected to announce a £1.5-1.6 billion takeover of Somerfield this week - £300 million less than the supermarket chain had been after when it went on the market a year ago.

The consortium that owns Somerfield, comprising Apax Partners, Barclays Capital, Robert Tchenguiz and Icelandic bank Kaupthig, bought the chain for £1.1bn in 2005, and had been hoping for £1.9bn when it started looking for a buyer in July 2007. In April, The Co-op offered £1.7bn.

The Co-op declined to comment, said the Financial Times, on whether a deal would be completed this week.

The deal will be scrutinised by the competition authorities and it is expected that The Co-op will eventually be forced to sell off up to 200 stores to rivals. A combined Co-op/Somerfield would be the UK’s fifth-largest supermarket chain, behind Morrisons.

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