The Kroger Co. and Albertsons Cos. agreed to shed more stores as part of a proposed merger in an effort to assuage concerns from federal and state regulators.

The plan for Kroger to acquire Albertsons in a $24.6B merger has faced scrutiny from antitrust authorities over the size of the proposed combined company. Kroger announced Monday that the two chains would divest 579 locations if the merger is approved, up from the 413 locations the chains had previously offered to offload in a bid to win regulatory approval.

It’s the latest effort to advance a merger that was first proposed in October 2022 but has faced opposition from the Federal Trade Commission, eight states and Washington, D.C., which sued in February to block the plan.

The stores that the two chains would divest from would be sold to C&S Wholesale Grocers, which operates chains like Piggly Wiggly and Grand Union and has partnered with SoftBank to raise the capital to make the acquisitions. C&S would pay around $2.9B in cash to acquire the stores and associated assets.

Kroger and Albertsons initially pitched a plan in September, prior to the antitrust suit, to sell 413 stores, plus eight distribution centers, two offices and five private label brands to C&S for $1.9B.

The two brands compete in many of the same markets, oftentimes anchoring shopping centers on either side of an intersection, raising concerns from regulators that a merger could lead to store closures, higher prices for groceries and lower wages for workers.

"We have reached an agreement with C&S for an updated divestiture package that maintains Kroger's commitments to customers, associates and communities, addresses concerns raised by regulators, and will further ensure that C&S can successfully operate the divested stores as they are operated today," Kroger CEO Rodney McMullen said in a statement.

Washington is slated to see the largest number of Albertsons and Krogers change hands if the merger is approved, with 124 locations being sold to C&S, up from 104 in the September proposal.

Other large additions by state include Arizona, where 101 Albertsons would be sold, up from 24 in the original proposal. In Colorado, 91 Albertsons would trade, up from 52.

Kroger said in the joint release that it believed the increased store sales would "bolster their position in regulatory challenges to the proposed merger, including pending court proceedings."

Outside of the FTC and state action, 25 consumers filed suit last February arguing that without store sales, the proposed merger would give the combined company control of 36% of U.S. grocery sales, which the plaintiffs argue would harm customers through higher prices and fewer options.

Kroger and Albertsons maintain that the updated plan will ensure that no stores will close as a result of the merger and that the deal keeps in place all employee collective bargaining agreements. Kroger has also committed to investing $500M to “begin lowering prices day one post-close” and an additional $1.3B to improve Albertsons stores.

The original merger plan was slated to close in early 2024 but the companies offered no timeline to execute the deal in Monday’s announcement. The joint announcement did say that "Kroger and Albertsons Cos. remain committed to defending the merger in court."