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Safeway and Albertsons, two of the largest grocery chains in the country, announced that the stores will merge to create one giant grocery network with 2,400 stores.
Bloomberg News noted that Safeway, the No. 2 grocery-store operator in the U.S., agreed on Thursday to be purchased by Cerberus.
Cerberus Capital Management is a New York private equity firm which owns Albertsons supermarkets.
According to CNN, the deal is valued at about $9 billion and no stores are expected to close because of the merger.
Safeway has about 250 stores in Northern California, where it has been the most dominant name in the grocery business. But many supermarkets have been struggling for years with the stiff competition and low prices offered at stores like Wal-Mart and Costco. Dollar stores, big-box supercenters and convenience stores have also squeezed grocers.
"Working together will enable us to create cost savings that translate into price reductions for our customers," said Albertsons CEO Bob Miller in a release.