Supermarket giants Kroger and Albertsons have been in discussions over a possible merger and could announce a deal as soon as this week, according to Bloomberg, citing anonymous sources familiar with the negotiations.

Details on a potential transaction were not available, the publication reported, noting that no final decisions have yet been made and that talks could still get delayed or fizzle out. 

A merger between the two companies would create a grocery retailing behemoth with the scale and purchasing power to rival Walmart and Amazon. As inflation has soared alongside growing competition and omnichannel cost pressures, the benefits of increased scale are growing. 

The report comes several months after Albertsons announced it had initiated a strategic review of its business portfolio. The retailer at the time said its board of directors would examine a range of possible actions, including “financial transactions and development of other strategic initiatives to complement Albertsons’ existing businesses.”

Both companies have engaged in numerous acquisitions over the years to expand their footprint across the country. The companies have significant store overlap in major markets, particularly on the West Coast, making a potential merger complicated from a regulatory perspective, said Neil Saunders, managing director with GlobalData Retail.

“The complexities of merging two giant businesses – both of which are a product of multiple acquisitions down the years – should not be underestimated,” Saunders noted in an emailed statement.

Kroger and Albertsons have also invested deeply in building up their digital operations, expanding their private label assortment and updating stores with services like in-store restaurants.

Albertsons’ stock price rose 11% on the news Thursday, while Kroger’s stock price fell around 2%.