The Ahold-Delhaize merger announced this week will create a trans-continental grocery powerhouse.

Dutch-headquartered Ahold will pay euro 25 billion (US$28 billion) for its Belgian rival Delhaize, creating one of the largest food and grocery retailers in the US. In Europe the new company will have greater market capitalisation than either Tesco or Carrefour, although the latter two’s sales are higher.

Ahold owns the Stop & Shop and Giant chains the online grocery delivery company Peapod in the US; Delhaize Food Lion and Hannaford.

The merger will see the four US chains come under the same parent, leading to supply chain efficiencies and increased buying power from suppliers.

In Europe, Ahold owns Albert Heijn, Delhaize trades under its own name.

In the merged entity the two will create, Ahold will hold 61 per cent of the stock. It will boast 6500 stores globally and a turnover of US$61 billion annually. About 2000 of the stores will be in the US, the balance in the two companies’ home markets and in Eastern Europe.

This week’s confirmation came more than a month after the two companies disclosed they were in merger talks.

Ahold CEO Dick Boer will head the merged entity, which remains subject to the formalities of final regulatory approval, possibly leading to the divestment of a small number of stores in the US to meet anti-trust concerns.