The Co-operative Group (Co-op) has agreed to buy rival Somerfield for about £1.5bn.

The Co-op, the UK's fifth largest supermarket chain, said the acquisition would strengthen its position in the British retail sector.

Peter Marks, chief executive of The Co-op, said: "This is good news for consumers and for competition in the grocery market where we will create a stronger fifth player in food and a convenience store chain with unrivalled geographic reach.

"For The Co-operative Group this is a transformational deal - cementing our position as the UK's premier community retailer and helping us significantly as we lead a renaissance of the Co-operative brand. Together, The Co-operative and Somerfield colleagues will be better placed than ever before to provide consumers with great choice, value and service.

"The acquisition of Somerfield will provide the rocket fuel for our three-year growth plan, outlined in April of this year. Under this plan we are revitalising our retail estate under a single unified brand - modernising our stores, improving our product offer and service levels for customers and members and reinforcing our Co-operative difference.

"There is a strong strategic fit between the two businesses, with both focused on the highly competitive top-up and convenience shopping market. We anticipate real cost and revenue synergies, enabling us to enhance still further the overall value we deliver to our customers."

Bristol-based Somerfield has around 900 stores in the UK, including one in Kingsbridge.

Somerfield, which was put up for sale in January, is owned by a consortium that includes private equity company Apex, Barclays Capital and property magnate Robert Tchenguiz.

They bought the chain for £1.1bn in 2005.