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According to an NBC report, Kroger is planning an all-cash acquisition of its rival supermarket chain. Kroger and Albertsons are crunching the numbers.  And the deal could be announced as soon as tomorrow.

When news broke that talks were underway, shares of Albertsons jumped. The stock was up more than 11% in Thursday afternoon trading. 

UPDATE: On Friday, Kroger announced that the Albertsons acquisition was agreed upon by all parties.  Ocado stock increased, as well. 

Rising prices in groceries 

The possible merger comes at a time when competition in the grocery industry is at a boiling point. And outlets are pushing "specials" to gain an advantage.

Major retailers across the globe have seen a boost in prices. And they continue to escalate sales prices to keep pace with the impact of soaring inflation and larger raw materials costs.

Some analysts believe that this supermarket merger will reduce competition among U.S. grocery outlets. And inevitably lead to higher prices for shoppers. 

A deal would create a combined company with a market valuation of about $47 billion, representing one of the biggest mergers in recent years in the retail space.

The grocery business operates on razor-thin margins. And inflation is continuing to drive up the cost of food in the US marketplace.

Acquisition news

The supermarket giants are 1 and 2 in the marketplace. 

Kroger with its headquarters in Cincinnati, Ohio, is second only to Walmart by earnings in the U.S. It has the largest number of retail locations with 2,800 stores and around 420,000 employees in 35 states. And it owns its namesake brand, along with King Soopers, Fred Meyer, Ralphs, and Harris Teeter.

According to its website, Boise, Idaho-based Albertsons, has over 2,200 supermarkets in 34 states with 290,000 employees. And operates over 20 brands including Safeway and Tom Thumb.

Kroger has more than double the market cap of Albertsons with $32 billion. And Albertsons' market cap is approximately $15 billion.

The merger deal would create a consolidated company with a market valuation of about $47 billion. And it represents one of the biggest mergers in recent years in the retail space.

In 2014, Albertsons obtained Safeway for $9.4 billion. 

About five years ago, Amazon acquired Whole Foods. The purchase price was $13.7 billion in an all-cash deal. Amazon, including Amazon Fresh, still makes up a small percentage of the U.S. grocery market.