Londis has bought the Topshop chain of convenience stores from Tedcastle Holdings.

Londis has had an agreement to supply the store since the franchise chain was set up in 1998 and enjoyed a joint branding structure with Tedcastle's TOP brand.

Topshop operates 120 convenience stores around the State, employing 2,000 people. Londis will integrate the chain with its 260 existing outlets.

No price was given for the deal but industry sources speculated that the Topshop chain might be worth between €7-€9 million.

Londis Topshop chief executive Mr Simon Healy said the move should lead to improved synergies in the group leading to "greater bargaining power from both a buying and marketing perspective".

Mr Michael Irwin, chief executive of the Londis group, which has a 7 per cent share of the Irish grocery market, hailed the success of the joint venture, which had led to "incredible growth" in the brand.

"We have enjoyed an excellent working relationship with Tedcastle Holdings over the last five years," he said. "We look forward to developing further over the coming years."

Topshop opens about four new franchised outlets each month. It operates in a highly competitive market in which rivals Spar and Centra are also looking to increase their market share.

Late last year Mr Healy said the chain expected to make sales of around €120 million in 2002.

Tedcastle's decision to sell the grocery chain, which operates on and off forecourts, is understood to reflect its desire to concentrate on its core business of fuel trading and distribution.

Despite the involvement of Tedcastle, only about half of the group's outlets are located at forecourts, and the majority of these are at petrol stations that are not owned by Tedcastle.

The company made a strategic decision that limiting itself to forecourt trading would limit its growth potential.

Tedcastle Holdings is a private company wholly owned by Mr John Reihill. He assumed full control in late 2001 when he bought out the interest of other family members.