The Co-operative Group has announced plans to acquire Southern Co-op in a deal that would bring around 300 retail and funeral locations under its control.
Proposals include food stores, funeral care branches and Starbucks coffee shops currently operated by the Portsmouth-based business.
An agreement would also see the Co-op Group acquire three crematoria, marking a return to the sector for the organisation.
Southern Co-op, founded in 1873, operates under the Co-op Food and Welcome brands.
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The deal follows extended discussions between the two organisations and was confirmed in an announcement to the London Stock Exchange on September 3.
Specific financial terms of the transaction have not been disclosed.
This move comes as the Co-op Group continues to recover from a cyber attack that resulted in losses of £126million, disclosed in recent financial updates.
The breach included £107million in lost profitability, £86million in margin costs and £21million in additional expenses.
Co-op Group plans Southern Co-op takeover covering 300 stores and funeral sites
| GETTYIn response, the company has launched a £200million cost reduction programme, with job cuts not ruled out.
Former boss Shirine Khoury-Haq stepped down last month following the fallout from the cyber incident, which totalled £300million.
Katie Allum has taken over leadership on an interim basis.
For Southern Co-op, the proposed merger comes as the business faces pressure from declining profits and rising operating costs.
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The takeover would impact approximately 4,500 employees across Southern Co-op’s grocery and funeral operations
|GETTY
If completed, around 300,000 Southern Co-op members would be integrated into the Co-op Group’s existing membership base of seven million people.
The transaction is being structured as a “transfer of engagements”, requiring approval from members and regulators before it can proceed.
Southern Co-op has recently closed branches in Dorset, Bristol and Petersfield as part of efforts to reduce costs.
Debbie White, chair of the Co-op Group, said: "This will bring together over 300 years of co-operative experience, while providing new and strengthened opportunities for members, customers, colleagues and suppliers of both of our co-operatives."
Chief Executive Officer, Ben Stimson, said: "The Co-operative Group shares our values and our commitment to democratic membership, ethical sourcing and fair reward, as well as our dedication to supporting local communities.
"By coming together, we can secure the co-operative future of Southern Co-op as part of a stronger combined Co-op Group, whilst creating an even stronger voice nationally and internationally to advance the co-operative cause."
Ms Allum said the deal would create "new opportunities" for members of both organisations.
She said it would provide greater benefits and expanded trading opportunities.
Completion of the deal is expected in the final quarter of 2026, subject to regulatory and member approval.