Spar wholesaler John Henderson Holdings stunned the independent retail scene in Northern Ireland this week by unveiling plans to acquire arch rival J&J Haslett for an undisclosed sum.
Hendersons has been given an exclusivity agreement by BWG, which owns Hasletts, while it conducts due diligence. That process could take up to three months to complete.
If it goes through, the deal would create a £476m business with interests across the independent scene and two major retail brands.
Hasletts owns the Mace franchise in Northern Ireland. It also runs the Nearbuy and XL Stop and Shop symbol groups plus the Holmes Cash and Carry business.
For its part, Hendersons supplies 400 Spar, VG and Vivo retailers in the province. It also owns the Andrew Millar convenience store group, which was ranked number 15 in the The Grocer Top 50 index.
Hendersons said the deal would be a positive development for the market in Northern Ireland, as it would create a business with enough clout to help retailers compete against the growing threat posed by the multiples.
One industry figure agreed. He said: "Since the multiples arrived here the independent market has been declining at 3% to 4% a year.
"It's a very crowded market and the symbol operators have been taking business from each other, which is not good for the sector.
"If this deal goes through it will lead to a much more solid wholesaling base."
He added: "Some retailers may think this is not good news because it limits competition. However, there is still plenty of choice out there."