SCOTMID has opened talks with Northumberland's Seaton Valley Co-operative over a proposed merger between the two organisations.
The proposed deal would extend Edinburgh-based Scotmid's presence in the north of England, following its merger with the Penrith Co-operative in 2013.
Seaton Valley Co-operative was established in 1864 and employs around 100 staff across five retail outlets and a Post Office in the south east of Northumberland.
If ratified, the proposal would see Seaton become part of the much bigger Scotmid co-op, which employs around 4700 staff in 350 retail outlets across Scotland, Northern Ireland and England.
The proposed deal offers a significant logistical benefit to Scotmid, with Seaton located 70 miles from Penrith. The stores in the Penrith network are closer to Edinburgh than some of Scotmid's stores in the north of Scotland.
In common with Scotmid's merger with the Penrith Co-op, the boards of the two organisations will now embark on a process of due diligence, before meetings are held with members of the Northumberland group over the proposal.
The Seaton Valley members will have the ultimate say on the deal with a vote on the proposal, on a one member one vote basis. This is not expected to occur until the latter part of the year.
It is understood that talks over the merger arose after Scotmid offered its expertise to the smaller organisation to drive membership members.
The two co-operatives said yesterday: "The boards of Scotmid Co-operative and Seaton Valley Co-operative have met with a view to merging the two societies later this year. Executive teams from both Societies will work together to draw up a timetable and plans for a potential merger.
"At this very early stage there will be no further comment from either society."
Scotmid's merger with the Penrith Co-op saw nine stores and post offices join the fold of the Edinburgh organisation. At the time of the merger, Penrith turned over £13m and had 179 staff.
In September, Scotmid announced a £2.1million operating profit for the half year to July 26, slightly ahead of the same period last year.
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