X5 Retail Group N.V. decided to set up a joint venture with Pyaterochka owner in Chelyabinsk; the new company is supposed to merge assets of Pyaterochka supermarket chains in Chelyabinsk and Yekaterinburg. X5 Retail Group N.V. is going to own 51% of assets, Pyaterochka owner will get 49% which the former will eventually buy out in two installments: 24% will be acquired in 2008 and 25% in 2009.

X5 Retail Group N.V. will contribute 26% of Pyaterochka’s assets in Chelyabinsk and 100% of Pyaterochka’s assets in Yekaterinburg to the new company. Chelyabinsk-based Pyaterochka owner will contribute 74% of Pyaterochka’s assets in Chelyabinsk. The transaction will be completed as soon as the Federal Antimonopoly Service approves of this.

‘This transaction gives X5 Retail Group N.V. control over 40 stores in Chelyabinsk with total area of 13,811 square meters and is going to become the first instance of the Group buying out a number of franchise stores as part of its mergers and acquisitions strategy that provides for selective buyouts of stores in developmentally important regions. The Ural cluster offers us splendid expansion opportunities, since the retail grocery market of Chelyabinsk and Yekaterinburg is comparable with that of Saint Petersburg,’ says the company’s Mergers, Acquisitions, and Business Development Director Andrei Gusev.