Ahold and Delhaize agreed to a merger this morning, creating Ahold Delhaize, which is valued at roughly $29 billion, according to the Wall Street Journal. Dick Boer, chief executive officer of Royal Ahold, will become CEO of the combined company. Frans Muller, CEO of Delhaize Group, will become deputy CEO and chief integration officer. 

"We believe that the proposed merger of Ahold and Delhaize will create significant value for all our stakeholders," Muller said in a press release. "Supported by our talented and committed associates, Ahold Delhaize aims to increase relevance in its local communities by improving the value proposition for its customers through assortment innovation and merchandising, a better shopping experience both in stores and online, investments in value, and new store growth. We look forward to working closely with the Ahold team to implement a smooth integration process and realize the targeted synergies."

The merger will create a complementary base of more than 6,500 stores with 375,000 associates serving over 50 million customers per week in the United States and in Europe. Each of the companies does roughly 60 percent of its sales in the United States.

Mats Jansson, chairman of Delhaize Group, will become chairman of Ahold Delhaize. Jan Hommen, chairman of Royal Ahold, and Jacques de Vaucleroy, Delhaize group director, will become vice chairmen of Ahold Delhaize.

"The proposed merger with Delhaize is an exciting opportunity to create an even stronger and more innovative retail leader for our customers, associates and shareholders worldwide," Boer said in the release. "With extraordinary reach, diverse products and formats, and great people, we are bringing together two world-class organizations to deliver even more for the communities we serve. Our companies share common values, proud histories rooted in family entrepreneurship, and businesses that complement each other well. We look forward to working together to reach new levels of service and success."

The transaction will create significant value, with anticipated run-rate synergies of $560 million per year.

Both companies are highly cash generative, which will allow Ahold Delhaize to invest in future growth and depver attractive returns to shareholders.

At completion, Delhaize shareholders will receive 4.75 Ahold ordinary shares for each Delhaize ordinary share. Ahold shareholders will own roughly 61 percent of the combined company's equity and Delhaize shareholders will own roughly 39 percent of the combined company's equity.

The transaction is expected to be completed mid-2016, following regulatory clearances, associated consultation procedures and shareholder approval.

Ahold’s U.S. banners are Stop & Shop, Giant Food, Giant Food Stores, Martin’s Food Markets and Peapod. Delhaize operates more than 1,300 Food Lion and Hannaford stores on the East Coast.

The executive committee and board of directors of Delhaize as well as management and supervisory boards of Ahold unanimously supported and recommended the transaction.