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Barclays will buy most of the banking operations of Britain’s biggest supermarket group Tesco for about 600 million pounds ($757 million), the companies said on Friday.

The deal follows last month’s move by Sainsbury’s, the UK’s No. 2 supermarket, to wind down its banking business and instead offer financial products through third parties.

It also comes ahead of a crucial strategy update from Barclays alongside its full-year results on Feb. 20, amid investor unease about its stock’s underperformance relative to rivals.

Barclays will take on Tesco’s existing banking perations in credit cards, loans and savings, adding 8.3 billion pounds of unsecured loans and around 6.7 billion pounds of deposits.

Tesco will retain all other existing activities of Tesco Bank, including insurance, ATMs, travel money and gift cards.

Shares in Tesco were up 1.4% in morning trading, while Barclays was down 0.3%

UK supermarket Tesco says profits surge as costs drop

About 2,800 Tesco workers will transfer to Barclays.

Barclays and Tesco have also formed a strategic partnership, initially for 10 years, that will see Barclays offer Tesco-branded banking products and services, using Tesco’s popular Clubcard loyalty scheme. Tesco will receive fees of 50 million pounds a year.

The acquisition and partnership, which are subject to regulatory approval, are expected to be completed in the second half of 2024.

“This strategic relationship with the UK’s largest retailer will help create new distribution channels for our unsecured lending and deposit businesses,” Barclays CEO C.S. Venkatakrishnan said.

Reuters reported in November that Barclays was exploring a potential acquisition of Tesco’s banking operations.

Tesco said the majority of the proceeds and a previously announced special dividend of 250 million pounds paid by Tesco Bank in August 2023 would be returned to shareholders through an additional share buyback.

The grocer said the deal would boost its balance sheet by offloading capital-intensive assets while retaining capital-light ones. Tesco also stands to gain around 100 million pounds after the settlement of its regulatory capital, the firm said.

It said it expected to make annual adjusted operating profit from the partnership and retained activities of 80 million pounds to 100 million pounds - more than half of the current year’s expected profits from Tesco Bank.

It added the deal would be “mildly accretive” to earnings per share.

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