Merger talks have been launched between the Midland Co-op and neighbouring operation the Ilkeston Co-op in Derbyshire.

The companies say the talks could "result in a formal transfer of engagement as early as November".

Lichfield-based Midlands Co-op trades across ten different counties and runs retail, travel, funeral and transport businesses with gross sales in excess of £749 million.

Ilkeston's principal activity is travel, with its travel business ranked as one of the largest independent travel companies in the UK, operating 42 branches throughout the East Midlands and South Yorkshire regions.

It also operates a department store, two bedding stores, a banqueting suite, and two car body shops.

Midlands Co-op chief executive John Fitzgerald said: "We are delighted to be in discussion with our neighbour, Ilkeston Co-op, and the prospect of trading cooperatively is logical in the current economic climate."

The Ilkeston board will recommend to its members on September 6 that the merger should go ahead.