Japanese convenience store operator Lawson Inc will buy upscale supermarket chain Seijo Ishii Co for about 55 billion yen ($503 million), including debt, from investment fund Marunouchi Capital, two sources familiar with the matter said.

Lawson confirmed in a statement that a formal decision to acquire Seijo Ishii was due on Tuesday and said it would disclose the details then. Marunouchi Capital was not immediately available for comment.

The deal is expected to be completed in late October, the sources said, declining to be identified because the decision is not yet public.

Smaller-scale specialty stores like Seijo Ishii that fall somewhere between convenience stores and supermarkets have become a popular format in Japan as the number of single-person households increases.

Seijo Ishii has over 100 stores in Japan and is accelerating store openings mainly at train stations and shopping malls.

Lawson this year opened the first of its Lawson Mart stores, which are aimed at marrying the convenience of 24-hour operations with value-added goods such as fresh produce and readymade foods. The company is targeting 700 to 800 Lawson Mart stores in Japan over the next three years.

Shares in Lawson opened up 0.8 percent, while the benchmark Nikkei average fell 0.4 percent.

Reuters first reported in April that Lawson was among the first round of bidders along with department store operator Isetan Mitsukoshi Holdings Ltd to take over the firm from Marunouchi Capital, which is held by Mitsubishi Corp and Mitsubishi UFJ Securities Holdings Co.