By Maarten van Tartwijk 

Dutch food retailer Koninklijke Ahold NV and Belgium's Delhaize Group confirmed Tuesday they are in talks about a possible $25 billion merger that could create one of the largest supermarket operators in the U.S.

Despite being based in Europe, both companies generate about 60% of their sales in the U.S., primarily along the East Coast. Ahold operates the Stop & Shop and Giant chains, as well as online grocery store Peapod, while smaller rival Delhaize operates the Food Lion and Hannaford banners.

No financial details of the potential deal were disclosed and the companies cautioned that the talks may not result in any deal. However, based on closing share prices Friday--before renewed speculation about a deal surfaced--the merged company would be valued at EUR22.91 billion ($25.79 billion.)

A tie-up between the two food retailers has been the subject of speculation for years, with the companies reportedly holding negotiations about a merger in 2006.

A combination would create one of the largest food retailers in Europe and the U.S. with around EUR54 billion in annual sales. Based on recent estimates by Morgan Stanley, a combination would have a market share of around 4.2% in the U.S., making it the country's fifth-largest food retailer.

Ian Walker contributed to this article.

Write to Maarten van Tartwijk at maarten.vantartwijk@wsj.com

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