ZAANDAM, the Netherlands—Grocery giants Royal Ahold NV and Delhaize said Wednesday they had agreed to merge in a transaction valued at US $28 billion. With a combined 6,500 stores in the US and Europe, the merged company will be known as Ahold Delhaize and will be headquartered in the Netherlands.

“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,” says Ahold CEO Dick Boer, who will become CEO of the combined company post-merger. “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.”

Seen as an increasingly likely deal over the past several weeks, the Ahold/Delhaize combination is expected to close in mid-2016. Both the Zaandam-based Ahold and Brussels-based Delhaize have a strong US presence, mainly on the East Coast. Ahold's US supermarket brands include Stop & Shop and online delivery service Peapod; the Delhaize portfolio includes Food Lion and Hannaford.

In connection with the proposed merger, Ahold's financial advisors are Goldman Sachs International and J.P. Morgan, and its legal counsels are Allen & Overy LLP and Simpson Thacher & Bartlett LLP. Bank of America Merrill Lynch and Deutsche Bank are acting as joint lead financial advisors to Delhaize, and Cravath, Swaine & Moore LLP and Linklaters LLP are acting as legal counsel. Lazard has also provided financial advice to Delhaize.