Kaupthing backing £200m deal
The boards of Costcutter and wholesaler and symbol group Nisa-Today have recommended that the two companies merge.

A deal will be subject to the approval of Nisa shareholders. A six-week consultation period will begin today, with a vote taking place in early July.

Icelandic investment bank Kaupthing has provided funding for the deal.

The combined company is expected to be valued at£200 million. It is hoped that combining the resources of the individual companies will help all their independent retailers and wholesalers take on the supermarkets.

A spokesman said: 'The Office of Fair Trading (OFT) inquiry into the big supermarkets this week lends credence to what we're doing. With the likes of Tesco moving into the convenience market the only way for us to survive and compete is to combine forces and increase our purchasing power.'

It is expected that Nisa-Today founder Dudley Ramsden will be chairman and Costcutter founder Colin Graves will be chief executive.

Nisa-Today has a membership of around 700 independent wholesalers and retailers, each with an equal share in the business.

Convenience store franchise group Costcutter has 1,400 branches across the country.

The OFT revealed on Tuesday that it will be referring the groceries market to the Competition Commission.