Retailers ICA Baltic and Kesko have finally signed their long-awaited merger agreement.

Sweden’s ICA Baltic, the parent company of Rimi Latvia, and Finland’s Kesko Food, have set up a joint venture, Rimi Baltic, to bring their operations under one roof. The new entity hopes to gain a 25% share of the retail market in the Baltics, and compete more effectively with Lithuanian-owned VP Market.

In 2004 the combined net sales of Kesko’s and ICA Baltic’s operations amounted to approximately €690m (US$909.7m). The new entity will operate a total of 160 stores across the Baltic region.

The European Commission granted regulatory clearance, under the Merger Regulation, to the joint venture in November last year.