Kroger and Albertsons supermarkets are in talks to sell more than 400 stores to C&S Wholesale Grocers for nearly $2 billion as part of their proposed $25 billion merger, according to a report from Reuters.

The divestiture, which was first reported to be in the works on Tuesday by Bloomberg, is part of a move to mollify antitrust regulators at the Federal Trade Commission.

Kroger and Albertsons plan to sell stores that are in the Pacific Northwest, the Mountain states and in California, Texas, Illinois, and the East Coast, Reuters reported. A deal could be announced as early as this week.

Kroger and Albertsons outlined the potential sale of 100 to 375 stores when they first announced their proposal in 2022. They have since disclosed they would cap divested stores at 650 locations.

Kroger and Albertsons declined to comment Wednesday and officials with C&S did not respond to emails from the USA TODAY Network seeking comment on the potential deal.

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Kroger-Albertsons merger

The proposed Kroger-Albertsons merger would be one of the largest retail takeovers in history. The deal would give Kroger almost 5,000 stores and more than 700,000 workers before an undetermined number of store divestitures.

The two companies have vowed not to close stores or layoff workers, but the unions and other critics are skeptical.

Consumer and union groups have opposed the deal, claiming it would hurt competition and ultimately raise prices and harm workers. Regulators have declined to comment as they decide whether to block it. Kroger executives have vowed to fight for the deal in court.

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C&S Wholesale Grocers

The deal would give C&S Wholesale, which supplies more than 7,500 supermarkets across the country, a much bigger footprint in the grocery store business. 

The private company currently operates a few dozen supermarkets, including 11 Grand Union stores in New York and Vermont as well and an unspecified number of Piggly Wiggly stores in Wisconsin and the Southeast.

SoftBank Group Corp, a Japanese investment group, is talking to C&S Wholesale about helping finance a small portion of the deal, Reuters reported.

Aldi to buy 400 Winn-Dixie and Harveys Supermarket grocery stores

The potential deal comes after Aldi announced last month it was buying about 400 Winn-Dixie and Harveys Supermarket stores across the Southeast in an agreement with parent company Southeastern Grocers. 

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"The time was right to build on our growth momentum and help residents in the Southeast save on their grocery bills,” Aldi CEO Jason Hart said in a news release.