Russian discount food retailer Pyaterochka is reportedly in merger talks with rival supermarket operator Perekryostok.

Were the deal to go through, it would create Russia’s largest retail company, based on the companies combines revenue of US$2.5bn. The two companies operate in several regions outside Moscow and St. Petersburg.

Russian newspaper Vedomosti has speculated that if an agreement is reached financial-industrial holding Alfa Group, who currently have a 90% stake in Perekryostok, would seek to gain control of the merged entity.