TOKYO (Kyodo) -- Japanese discount supermarket chain operator Trial Holdings Inc. said Wednesday it will acquire rival Seiyu Co. for 380 billion yen ($2.5 billion) and make it a wholly owned subsidiary, creating a retail group with sales exceeding 1 trillion yen.

Under the deal set to close by July, Trial, whose stronghold is in southwestern Japan, will acquire all shares in Seiyu held by U.S. investment firm Kohlberg Kravis Roberts & Co. and retail giant Walmart Inc. Seiyu operates many stores in Tokyo and its vicinity, as well as in central and western Japan.

KKR and Walmart currently hold 85 percent and 15 percent stakes in Seiyu, respectively.

Fukuoka-based Trial pledged to preserve jobs at Seiyu and maintain the supermarket's brand.

"We will integrate our strengths and offer more value than we had before," Hiroyuki Nagata, a Trial board member, told a joint press conference with Seiyu in Tokyo.

The acquisition could reshape Japan's retail industry, though major players like Seven & i Holdings Co., which operates a major convenience store chain, and supermarket giant Aeon Co. each generate around 10 trillion yen in annual revenue, far outpacing smaller competitors.

Seiyu, once part of the Saison Group -- one of Japan's largest retail conglomerates led by the late charismatic businessman Seiji Tsutsumi -- became a wholly owned subsidiary of Walmart in 2008.

In 2021, Walmart sold 85 percent of its stake in Seiyu to KKR, and Japanese e-commerce firm Rakuten Group Inc. Rakuten later sold its stake to KKR.

KKR has been looking to sell Seiyu in recent months, with Aeon and Pan Pacific International Holdings Corp., which operates Japan's Don Quijote discount store chain, emerging as potential bidders alongside Trial.

Trial posted a net profit of 11.44 billion yen in the fiscal year that ended June last year, up 41.5 percent from a year earlier. Sales rose 9.9 percent to 717.95 billion yen.

Seiyu had a net profit of 33.64 billion yen on sales of 664.75 billion yen in the year ended December 2023, Trial said in a press release.