The Manchester-based Co-operative Group and Rochdale-based United Co-operatives have agreed the terms of the proposed merger which would create an organisation responsible for 80% of the co-operative retail trade in the UK.
Members of both societies are being recommended to accept the proposal when they meet in April and May to consider the deal. The Co-operative Group has 3.5m members, while United Co-operatives has 930,000. If the merger goes ahead, the newly enlarged society is expected to begin operating in late July.
The retail group would operate from sites stretching from Cornwall to the Scottish Islands, with particular strength in the north of England and the north Midlands.
At present, the Co-operative Group, one of the participating retailers in this year's Supermeat competition, is the UK's largest, with an annual turnover of £8bn. United Co-operatives has a turnover of £2.5bn a year.