Japan’s biggest dairy company, Meiji Dairies, and confectionery maker Meiji Seika have announced plans to merge.

Both companies will have roughly the same number of shares in the new company, which will become the nation’s second-largest foodmaker with an estimated market value of about $3.7 billion.

The merger will help increase buying power for ingredients such as cocoa and wheat, which both hit record highs this year. It will also create a company with total sales in excess of