Slovenia-based retailer Mercator said today (17 June) that it will start merger talks over a possible merger with Croatian food manufacturer and retailer Agrokor.

Mercator, which runs around 1,500 stores across the Balkans, said it had received a letter from Agrokor, in which the Croatian firm expressed an interest in a "strategic combination" and wanted to start talks.

The negotiations would centre on a proposal Mercator made in March. Mercator president Ziga Debeljak wrote to his counterpart at Agrokor, Ivica Todoric, to state that the Slovenian firm was interested in "examining the possibility" of buying the Croatian company's retail operations.

In the letter, Debeljak said that, if a deal was struck, it would allow Agrokor to focus on its "core" retail operations.

Agrokor is the largest privately-owned company in Croatia. It owns the Konzum retail chain and a number of food manufacturers, including ice cream maker Ledo, meat processor PIK Vrbovec and mayonnaise firm Zvijezda. 

A spokesperson for Mercator declined to comment further. However, the announcement is the latest development surrounding Mercator.

Yesterday, investors holding over 50% of Mercator shares agreed to pursue a joint sale of their combined stake.

Meanwhile, on Wednesday, Mercator revealed it was in talks to buy two retailers in Serbia, its third-largest market.