Kroger (NYSE: KR) and Albertsons Companies, Inc. (NYSE: ACI) today announced that they have entered into an agreement under which the companies, each with iconic brands and deep roots in their local communities, will merge to create a national footprint and unite around Kroger’s Purpose to Feed the Human Spirit.

Kroger is the parent company of Ralphs and Albertsons is the parent company of Vons in the Santa Clarita Valley.

Under the terms of the merger agreement, which has been unanimously approved by the board of directors of each company, Kroger will acquire all of the outstanding shares of Albertsons Companies, Inc. for an estimated total consideration of $34.10 per share, a total value of approximately $24.6 billion, including the assumption of approximately $4.7 billion of Albertsons Cos. net debt.

It is expected that some Albertsons (Vons and Safeway) stores will be spun off at closing of the merger deal to a new company called SpinCo.

Together, Albertsons Cos. and Kroger currently employ more than 710,000 and operate a total of 4,996 stores, 66 distribution centers, 52 manufacturing plants, 3,972 pharmacies and 2,015 fuel centers.

The merger will create a company that will span across 48 states and the District of Columbia.

“We are bringing together two purpose-driven organizations to deliver superior value to customers, associates, communities and shareholders,” said Rodney McMullen, Kroger Chairman and Chief Executive Officer, who will continue serving as Chairman and CEO of the combined company. “Albertsons Cos. brings a complementary footprint and operates in several parts of the country with very few or no Kroger stores. This merger advances our commitment to build a more equitable and sustainable food system by expanding our footprint into new geographies to serve more of America with fresh and affordable food and accelerates our position as a more compelling alternative to larger and non-union competitors. As a combined entity, we will be better positioned to advance Kroger’s successful go-to-market strategy by providing an incredible seamless shopping experience, expanding Our Brands portfolio, and delivering personalized value and savings. We’ll also be able to further enhance technology and innovation, promote healthier lifestyles, extend our health care and pharmacy network and grow our alternative profit businesses. We believe this transaction will lead to faster and more profitable growth and generate greater returns for our shareholders.”