Spanish retailer Eroski is to issue €70m (US$83.0m) worth of bonds to finance part of its purchase of supermarket chain Mercat.

The deal to buy Mercat, a chain of 125 supermarkets in the Balearic Islands, was signed last week and the bond issue subsequently approved.

Eroski bought a 40% share of Mercat in 1997 to enter the Balearic Islands. Eroski plans to first increase its stake to 59% and then gradually increase that until it has acquired 100% of the retailer by 2013.

With the purchase, Eroski will have a 20% share of the market in Balearic Islands. Mercat, which has annual turnover of €445m, operates under the SYPConsum banner, a name that was agreed on when Eroski first entered the market in 1997.