Whole Foods Market has surprised investors by announcing a proposed merger with Wild Oats Markets, a similar though much smaller chain that has also made a name as a major organic food retailer, The New York Times reports.

Whole Foods would pay $565 million, or $18.50 a share, for Wild Oats, a 23 percent premium over the average share price the last month. The company would also assume $106 million of debt.

The demand of natural foods has increased sharply in recent years as consumers have tried to eat healthier, and competition has grown as larger retailers like Wal-Mart and Target have aggressively added organic products, according to The Times. At the same time, new competitors like Trader Joe’s have offered the products at lower prices.