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The boards of Manchester's Co-operative group and Rochdale's United Co-operatives have agreed a merger which would create the world's largest co-operative group.

The Co-operative Group has 3.5 million members while United Co-operatives has 930,000 members.

In a joint statement, Bob Burlton, chair of the Co-operative group, and Bill Hoult, president of United Co-operatives, said: "We are delighted that our two boards have given the green light to the merger.

"If approved by our members, it will be the most far-reaching in the history of the co-operative movement in the UK, creating the world’s largest consumer co-operative, with a turnover of more than £9 billion."

They add: "In the highly competitive markets we operate in, it will help to ensure the continuing growth and profitability of our businesses so that we can reward our members and fulfil our social goals in the communities we serve."

Peter Marks, the current chief executive of United Co-operatives, has been named the head of the newly created trading group.

Commenting on the boards' decision, Mr Marks said: "The two societies' activities are geographically complementary and, together, account for more than 80 per cent of co-operative retail trade in the UK."

Members of the two co-operative groups will meet in April and May to vote on the merger which has been recommended by the boards of both groups.