The Somerfield supermarket name will gradually disappear from the high street after completion of a £1.6bn takeover by the The Co-operative Group.

Dozens of Somerfield stores across the country and Kent/Medway will be re-branded under the Co-op banner over the next two years. Most staff will be transferred without any loss of rights, although many head office jobs in Somerfield’s Bristol HQ are likely to go.

The deal, approved by the Office of Fair Trading (OFT), will make the Co-op the fifth biggest player in the UK grocery market - after Tesco, Asda, Sainbury’s and Morrisons - with eight per cent. It will have a total of 3,000 stores with annual sales of more than £7bn.

But the OFT ordered the sale of certain stores that are close to existing outlets. Somerfield stores in Whitstable, Margate, Larkfield, Edenbridge and Gillingham are being sold to other operators.

Somerfield, which has had many ups and downs under different managements, can trace its origins back to 1875 when it was founded as a small family grocery.

Milestones include taking over Gateway supermarkets, floating on the Stock Exchange, merging with Kwik-Save, buying 114 Safeway stores from Wm. Morrison and returning to private ownership in 2005.

Peter Marks, chief executive of The Co-operative Group, said: "This is great news for customers of both The Co-operative and Somerfield. It is a transformational deal which cements our position as the UK’s number one community retailer and returns us to the premiership of food retailers. It is no longer the Big Four, it’s the Big Five."

He added: "There is a strong strategic fit between these businesses and we are looking forward to creating a single business combining the inherent strengths of both Somerfield and the Co-operative Group. Somerfield has some great people and we are delighted to welcome them to the Co-operative family.

Paul Mason, chief executive of Somerfield, hailed its "phenomenal turnaround" in the past three years. "The Co-operative Group is buying a business that is in rude health, with strong, positive like-for-like sales, and a profit margin that has doubled since the business was taken private in 2005," he said.