It was revealed this week that The Co-operative Group is locked in exclusive talks to buy Somerfield. The chance to purchase the UK's fifth-largest chain isn't exactly perfect timing. The Co-op has been digesting the mother of all mergers, since joining forces with United Co-operatives last July to create the world's largest society and is currently midway through a £200m overhaul of its food stores. But clearly, it sees Somerfield as too good an opportunity to pass up. And despite the ongoing assimilation of United, analysts and those in the wider co-op movement all agree Somerfield would be a good strategic fit and would substantially improve The Co-op's market share and buying strength. Morrisons' severe bout of indigestion following its 2004 takeover of Safeway is well known, but spectators believe that although integrating a business the size of Somerfield would be a challenge, it is well rehearsed in acquisitions and, as Morrisons has shown, could emerge a stronger business. Its appetite is clearly more sizeable than we thought.

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