Private equity firm Cerberus Capital Management on Thursday confirmed a deal purchase grocery store chain Safeway for more than $9 billion.
As part of the deal, Cerberus would pay roughly $40 a share for Safeway, which includes $32.50 per share in cash.
In late trade on Thursday, Safeway shares traded at around $39.40. (Click here to track the grocery store chain's stock.)
Cerberus already owns Albertsons, which operates 1,000 stores and 12 distribution centers in 29 states and employs approximately 109,000 associates. The deal would greatly expand Cerberus' reach into the grocery store arena. Currently, there are 1,600 Safeway stores across the U.S. and Canada.
"This transaction offers us the opportunity to better serve customers by adapting more quickly to evolving shopping preferences in diverse regions across the country," said Albertsons' CEO, Bob Miller, in a statement.
Such a tie-up would vault it closer to the reach of Kroger, which operates 2,640 supermarkets and multi-department stores in 34 states and the District of Columbia.
Kroger, which completed its acquisition of Harris Teeter earlier this year, has also been considering a bid for Safeway.
The Wall Street Journal first reported news of the preliminary deal.
This story originally appeared on CNBC