In the ongoing saga of the proposed merger between Kroger and Albertsons, a new agreement has been reached that will see 91 Safeway locations in Colorado sold to C&S Wholesale Grocers. The companies unveiled the updated divestiture plan on Monday in an effort to address the concerns raised by federal regulators regarding the merger.

Under the revised plan, C&S Wholesale Grocers, a New Hampshire-based grocery supplier and operator, will purchase a total of 579 Kroger and Albertsons stores in areas where they overlap for a sum of $2.9 billion. This represents an increase from the original plan announced in September, where C&S had intended to acquire 413 stores for $1.9 billion.

As part of the agreement, C&S will acquire the 91 Safeway stores in Colorado under a license agreement and will continue operating them under the Safeway banner. The company will also gain access to specific private-label brands available in these stores. Currently, there are 103 Safeway stores and two Albertsons stores in Colorado.

Once the merger is finalized, Kroger, operating as King Soopers and City Market in Colorado, will re-brand the 14 remaining Safeway and Albertsons stores in the state. However, the exact details of which 14 Safeway locations will be re-branded are yet to be disclosed. Additionally, C&S will be granted the license to use the Albertsons banner in California and Wyoming, as well as the Safeway banner in Arizona.

Rodney McMullen, Chairman and CEO of Kroger, expressed optimism about the updated divestiture plan, assuring that no stores would be closed as a result of the merger. He also emphasized that all frontline associates will continue their employment and receive industry-leading health care, pension benefits, and bargained-for wages. McMullen believes that the merger with Albertsons will bring lower prices and increased choices for customers while securing the long-term future of unionized grocery jobs.

Despite these efforts, it remains unclear whether the new divestiture plan will satisfy regulators. In February, the U.S. Federal Trade Commission filed a lawsuit seeking to block the $24.6 billion merger, citing concerns that reduced competition could lead to higher grocery prices and lower wages for workers.

Kroger and Albertsons initially announced their intention to merge in October 2022, citing the need to enhance their competitiveness against retail giants Walmart, Amazon, and other major rivals.