Slovenian food retailer Mercator has announced plans to launch a public takeover bid for Serbia and Montenegro's biggest retail chain, C-Market.

"Mercator decided for a takeover because of the opportunity for faster growth of our retail network in Serbia and Montenegro," the company was quoted by Reuters as saying.

"Following a successful takeover it (Mercator) would become the leading retail company in the country," the company's statement added.

Mercator's bid is subject to approval by Serbia's Securities Commission, which is expected to make its decision by the end of the week, reported Reuters.

C-Market, which has a market share of around 5%, operates 242 stores and employs around 3,500 people. Mercator has said it aims to achieve a 20% market share in Serbia and Montenegro over the next two to three years.