A retail group with stores across Scotland is to table merger plans to its members.
Lothian Borders and Angus Co-operative Society (LBACS) said it hoped to join up with the UK-wide Co-operative Group.
The Scottish organisation runs 66 food, pharmacy, petrol, funeral and non-food outlets and employs about 1,200 staff.
As well as trading in the Lothians, Borders and Angus areas it also operates stores throughout Grampian and Dumfriesshire.
As of 28 January, the society's turnover was £123m with an operating profit of more than £4m.
'Position of strength'
The proposed merger will be considered by LBACS members at a series of meetings in the autumn.
Chief executive Bob Jamieson said the timing of the move made business sense.
"We are approaching this proposed merger from a position of considerable strength," he said.
"We have a robust trading position and a strong balance sheet, but we believe the best way to maintain co-operative trading in the areas in which we operate is to seek this merger now.
"We also believe the long-term future of the co-operative movement is best served by greater consolidation, with the ultimate objective of creating one highly successful society covering the whole of the UK."
Shared vision
The proposal was welcomed by Co-operative Group chief executive Peter Marks.
"LBACS is a very strong, well-run society and I am delighted its board and management share our vision of creating a strong Co-operative Group able to compete effectively in tough market conditions," he said.
"We also believe the proposed merger will be of enormous benefit to the communities which LBACS has served with distinction over many years."
The Co-operative Group is a much larger business than its proposed Scottish partner.
In 2007 it had an annual turnover of £9.4bn and about 87,000 employees in the healthcare, travel, funeral care and financial services sectors.
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