The deal would have seen Co-op become a retail business with over 4,000 stores, up from circa 2,500. It is understood the offer was rejected weeks ago but the decision has only just come to light.
There has been speculation that Costcutter is looking to partner with another retailer, following suit with supermarkets like Tesco, Asda and Sainsbury’s which have all announced partnerships and collaborations in recent months.
Tesco took over wholesaler Booker in March with a £3.7bn deal, resulting in the supermarket reporting a sales increase in the past three months. Its group sales increased by 1.8% in that period.
Asda and Sainsburys also announced that they would be merging in a deal worth £13bn. This will create a business with 31% of the market share, which prompted concerns from industry bodies over fears that the merger would drive down prices and standards.
The Competitions and Markets Authority (CMA) is currently looking into the merger, which some fear could lead to a reduced choice for consumers and an increased concentration in the market.
In November 2017, Co-op and Costcutter made a wholesale agreement with Costcutter paying roughly £500m a year to be supplied exclusively by the Co-op. Earlier this year, Co-op took over Nisa for £143m.
Co-op declined to comment and Retail Sector has contacted Bibby Line.