You may not recognize the names Ahold and Delhaize, but you probably recognize some of the grocery brands that they own. Delhaize is the parent company of Hannaford and Food Lion, and Ahold is the parent company of U.S. chains Stop & Shop and Giant, as well as the online grocery delivery company Peapod. If regulators approve, the two companies will merge, and the transaction will become final in the middle of next year.

Why do two companies that are already massive and have global reach want to get hitched? For the same reason that companies always give: they want to be competitive. In the grocery sector, traditional supermarkets have competition from discount stores like Walmart and Target that sell groceries, from discount chains like Aldi, and also from warehouse clubs and specialty grocers.

Customers are taking off from all sides, and the grocery holding companies believe that they need to band together to compete. The companies claim that by combining, they could save $560 million. The combined Ahold Delhaize would be based in the Netherlands, and be worth $29.11 billion, with around 6,500 stores.

Ahold Deal Would Create One of the Largest U.S. Grocery Chains [NY Times]
Ahold, Delhaize Agree to a Merger [Wall Street Journal]
Ahold, Delhaize complete merger agreement [Supermarket News]

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.