X5 Retail Group, Russia's largest food retailer, has continued its expansion drive with the acquisition of Moscow-based grocer Strana Gerkulesia.

The US$65m deal will see X5 buy 29 discount stores. Five outlets are located in Moscow with 16 stores based close to the Russian capital. The other eight stores are in the Moscow and Tver regions.

Andrei Gusev, M&A and business development director at X5, said integrating the stores into its soft discount business Pyaterochka would lead to "significant synergies".

"Re-branding, changes in assortment and introduction of X5's pricing policy will enable us to increase the sales per square meter of the new stores to reach Pyaterochka's average level," Gusev said.

The acquisition of Strana Gerkulesia is X5's second such deal in eight weeks. In October, the company agreed a US$115m deal to buy regional chain Korzinka.