By Ian Walker and Archie van Riemsdijk 

European grocery chains Royal Ahold NV and Belgium's Delhaize Group have agreed a EUR26.07 billion ($28.63 billion) merger of equals, based on their closing share prices Tuesday, creating one of the largest supermarket operators in the U.S.

Under the deal Delhaize shareholders will receive 4.75 Ahold ordinary shares for each share held. Ahold shareholders will own 61% of the combined company's equity and Delhaize shareholders will own the rest.

Ahold said it would terminate its continuing share buyback program and return EUR1 billion to shareholders via a capital return and a reverse stock split before completion of the transaction.

The combined board will be lead by Mats Jansson as chairman with Dick Boer as chief executive.

Write to Ian Walker at ian.walker@wsj.com and Archie van Riemsdijk at archie.vanriemsdijk@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires