The£1.57 billion acquisition, revealed on Wednesday, will be the biggest since Morrisons bought Safeway in 2004 – a deal that rapidly went off the rails.
However, Marks said the Co-op and Somerfield are “very much aligned from a strategy point of view”. He believes there will be no culture clash, despite the contrast between Somerfield’s private equity ownership and Co-operative values.
“Both are retail convenience businesses. I’m not sure there is a cultural difference,” he said. “If you’ve worked in a shop, you’ve worked in a shop.”
Blue Oar Securities analyst Greg Lawless said that, while the deal propels Co-op back into the big league, the history of food retail mergers shows successful integration can be difficult.
“If you look back, some of the grocery mergers have been a disaster,” Lawless said. “Co-op does have experience of mergers, but only in the co-operative world and Somerfield is a very different beast.”
Somerfield’s management will stay on board until the integration is complete and Marks said he and Somerfield chief executive Paul Mason were “joined at the hip” in their approach to the process.
It is widely understood that Mason will step down following the integration, although some key Somerfield bosses are expected to stay on.
Marks said it would be “naïve to say there would not be any job losses”, but the focus at present is on getting the best out of both businesses.
“Co-op is not afraid to admit that someone else does something better,” he said. “The great thing about integration is that we get to have a long look at what they’re doing so we can create the best of the best.”
All Somerfield stores will be rebranded and Marks said this is likely to take two to three years, while the operational integration will take just 12 months.
Up to 200 Somerfield stores are likely to be sold off to competitors and Marks is confident he can work effectively with the Office of Fair Trading on the issue.
Bernstein food analyst Christopher Hogbin said disposals could include the 100 largest Somerfield stores.
“This would leave the combined group more focused on smaller convenience store formats, making both the deal financing and the post- merger integration easier,” he said.