Following the Co-operative Group's £1.57bn proposed takeover of the Somerfield supermarket chain, the Office of Fair Trading (OFT) has announced that while the merger would not cause competition concern at a national level, concerns in 126 local markets must be resolved.

The Co-op has responded with a divestment package to meet each of the OFT's concerns and the OFT is confident that all local competition concerns will be remedied.

"The Co-operative Group and Somerfield welcome the announcement which clears the way for the creation of a stronger fifth player in the grocery market. This is good news for consumers and good for competition," says a Co-op spokesman.