A merger of farm-supply co-operatives Farmlands and South Island-based CRT would be ideal, said CRT chairman Don McFarlane.
Both have commissioned independent consultants to investigate pitfalls and advantages.
"They are very complementary businesses," McFarlane said. "It is probably the perfect merger in that there would probably be no store closures, the names would stay in both islands and all the people that currently service customers would stay.
The two had enjoyed a relationship "for years" to secure deals and share information.
"It will give us a national co-operative that will give us a good balance with the other national rural supply groups. Co-operatives are really about democracy in action - it really is about people ownership with no big institutional shareholders or anything like that.
"It is just 26,000 CRT shareholders and 28,000 Farmlands shareholders - you can't get a broader ownership base than that.
"At the end of the day the shareholders of both companies will vote on the proposal to decide if the business case and the information provided to them shows that there is good economic advantages in doing this."
Combined turnover would be about $2 billion. Farmlands has more retail outlets, while CRT has a real estate division and a nationwide fuel-supply business.