The Co-op Group has confirmed it plans to sell 298 of its small stores to the McColl's Retail Group in a £117 million deal.
The acquisition, which is subject to approval from regulators and McColl's shareholders, was revealed yesterday and will see just over 3800 Co-op staff transferred to McColl's as part of the agreement.
The news comes after rumous of the deal first emerged last month.
McColl's chief executive Jonathan Miller said the acquisition of the Co-op stores would accelerate its growth strategy.
"These stores are profitable, well invested, and the perfect size for our operating model," he said.
"We expect the transaction to be significantly earnings enhancing for our shareholders."
The news comes as the Co-op mutual plans to overhaul its retail footprint across the UK and prioritse its plans to drive up sales with own-brand products.
"[It] is completely in line with our strategy, as these stores did not allow us to provide a sufficiently compelling own-brand offer for our members going forwards," Co-op Food chief executive Steve Murrells said.
The sell-off tied in with plans to grow Co-op's membership total to one million by 2018, while increasing the total sales to 50 per cent.
"The proceeds will be re-invested to drive sustainable growth for our members and I'm delighted that all 3808 colleagues will transfer to McColl's on the same terms and conditions," Murrells said.
McColl's said the acquisition of the stores would be partly funded by placing 10.5 million shares to new and existing investors with the aim of raising £13.1 million.
McColl's, which currently owns 933 convenience stores across the UK and 433 Martin's newsagents, said the acquisition would bolster sales.