Retailer ICA has confirmed that 350 jobs will be lost in Norway as a result of its cooperation agreement with Nordic retailer Norgesgruppen.

The companies have signed a deal that will see the two firms work together in their sourcing and distribution networks. The cooperation agreement coordinates distribution and logistics between ICA Norway and Norgesgruppen’s wholesale company, Asko.

ICA said greater scale would help it become more competitive in Norway. A spokesperson for the company said “the hope” is that higher purchasing power will give the retailer more sway when it comes to purchasing negotiations.

In addition to this, the spokesperson said the company is targeting cost savings through the deal. While it is “too early to say” what the level of these savings will be, the company is eliminating 350 positions. The company will be handling 60% less distribution volume, the group indicated.

Costs associated with the tie-up will total in the region of NOK150m and will be charged in the first quarter of 2013.

ICA Norway has embarked on a number of initiatives designed to improve its operating performance, including the sale of its Maxi outlets.