The Co-operative Group (Co-op), the UK's fifth largest supermarket chain, has agreed to buy rival Somerfield - and looks likely to sell off some of its newly purchased stores.
The Co-op bought Somerfield for £1.57bn ($3.1bn) saying the purchase would strengthen its position in the UK retail market.
Manchester-based Co-op, a mutual outfit run on behalf of its 2.5 million members, said the deal was done on a cash-free and debt-free basis.
Co-op has more than 4,300 UK retail outlets and employs 85,000 people.
Somerfield has about 900 stores.
They bought the chain for about £1.1bn three years ago.
It was put up for sale in January and the Co-op first expressed an interest in April.
The Co-op may now be told by competition watchdogs to sell some of the stores it has purchased.
The latest figures from research firm TNS, show that in the 12 weeks to the middle of June, the Co-op had 4.4% of the UK grocery market, and Somerfield 3.7%.