Co-op to phase out Somerfield after £1.57bn takeover
LONDON - The Co-operative Group is planning to phase out the Somerfield brand after acquiring the supermarket chain for £1.57bn.
Somerfield has around 900 stores and it is expected that the Co-op will sell some of them off if the Office of Fair Trading has concerns over local competition issues.
According to a spokeswoman, the Co-op is not giving a timescale for rebranding the stores.
Co-op said that its combination with Somerfield would make it the fifth largest food retailer in the UK, with a market share of around 8%. It will focus on a convenience offering, and will have more than 3,000 stores and a turnover of £8bn.
Peter Marks, chief executive of the Co-operative Group, said: "This is good news for consumers and for competition in the grocery market.
"For the Co-operative Group this is a transformational deal -- cementing our position as the UK's premier community retailer and helping us significantly as we lead a renaissance of the Co-operative brand."
The first Somerfield store was launched in 1990 by the Gateway Corporation, which subsequently changed its name to Somerfield, floating on the stock market in 1996.
It merged with Kwik Save in 1998 and acquired 114 Safeway stores from WM Morrison in 2004.
Somerfield was acquired in 2005 for £1.1bn by a consortium consisting of Apax Partners, Barclays Capital and the Tchenguiz family trust. Kwik Save was sold in 2006 to Back to the Future, but went into administration in 2007.
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