The Co-operative Group is expected to unveil its long-awaited £1.6bn takeover of Somerfield today.

Banking sources said that they were putting the finishing touches to the deal last night.

The acquisition will make the Co-op Britain's fifth-biggest supermarket chain, with more than 3,000 stores and annual sales of £10bn.

Somerfield's shareholders, which include Robert Tchenguiz, the property tycoon, Apax and Barclays Capital, had been hoping to sell the business for as much as £2.5bn before the credit crunch.

The Times, Daily Telegraph