The Supervisory Board of X5 Retail Group has approved the acquisition of Formata Holding BV, the owner of the Karusel chain of hypermarkets.

The deal is worth US$920-$970m in shares and cash, Russia's largest food retailer by sales said in a statement.

Up to 25% of the purchase price will be paid for with new shares in the company while the method of paying the remaining cash is still to be decided. X5 said a number of forms of equity financing are being considered, including the possibility of granting existing GDR holders rights to subscribe to additional GDRs.

"The Karusel brand will be integrated into our Mercado Supercentre banner," a spokesperson for the Netherlands-based X5 told just-food. "We believe that the additional selling-space will greatly enhance our presence across Russia."

The transaction is expected to completed on 1 July.