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Wednesday, 8 March, 2000, 18:39 GMT
Co-op merger approved

The Co-op has been losing market share
Board members at the Co-operative Wholesale Society have given the green light to a 4.7bn merger with Co-operative Retail Services.

The merger of Britain's two biggest co-ops, which run hundreds of supermarkets and funeral homes across the UK, means the end of an era for the movement.

It will involve about 320 redundancies from the total workforce of more than 50,000.

A spokesman said the job cuts would be made through voluntary and compulsory redundancies and most would be at the two head offices.

CRS members voted overwhelmingly in favour of the merger last Saturday.

The head office of the combined operation, which will trade under the CWS banner from April, will be in Manchester, the current base of CWS.

CRS chief executive Andy Meehan said CRS headquarters in Rochdale building, only four years old, had been put up for sale.

He said the merged entity would be better placed to revamp the combined network of 1,100 stores and help them battle bigger rivals like Sainsbury's and Tesco.

New CWS would be a major force in retailing, banking, insurance, farming, funerals, travel, car sales and the dairy trade, he added.

'Tails up'

Graham Melmoth, CWS chief executive who will lead the new business, said: "Our tails are up. This gives us the prospect of bringing two lively organisations together and creating a situation where two-plus-two-equals-five."

Mr Melmoth successfully fought off a hostile takeover bid by would-be carpetbagger Andrew Regan three years ago.

But neither were confident the new society would not fall prey to any other bidders.

Mr Meehan said: "Getting this merger approved on a friendly basis was hard enough. To do it on a hostile basis is very difficult to envisage."

The societies are already revamping Co-op convenience stores under the Welcome brand and there are plans to update their bigger outlets.

Following the deal, United Norwest - the last remaining major independent society - faces increased pressure to join them.

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See also:

05 May 99 |  The Company File
Co-op closes its non-food stores
26 May 98 |  Business
Co-op fights to halt decline
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