German food retailer Rewe has announced it is to enter the Russian market via a joint venture with Moscow-based retail group Marta.

Dr Dieter Berninghaus, CEO of Rewe, and Georgy Trefilov, president of Marta Holding, have signed a basic agreement to open a supermarket chain together in Russia.

Over the next three to five years, the companies will invest US$0.5bn in a joint company, called Billa Russia, with Rewe holding 75% of the joint venture and Marta 25%.

Marta's existing supermarkets will be converted to Rewe's Billa brand. By the end of this year, at least 20 Billa supermarkets should be converted and re-opened in Moscow, Rewe said.

"In the course of the consequent internationalisation strategy of the retail group, entry into the Russian market is a logical step for Rewe," said Berninghaus.

"Russia has been a focus of ours for some time. With growth rates of approximately 7%, the Russian economy, together with that of China, is at the top worldwide. No other European country offers retailers comparable growth potential," he added.