Russias X5 Retail Group says it had purchased 100 percent of regional rival Agrotorg-Rostov for 400 million roubles. As a result of the transaction, X5s will strengthen its geographic presence in the south of Russia, with a better balanced multi format store portfolio, the company said. Russias largest food franchise retailer by revenue, which posted a third quarter net loss of US14.7 million at the beginning of the month, said it would give priority to discounters in anticipation that the global financial crisis will shift consumer demand to cheaper goods. The buyout is the first transaction in an inevitable process of Russian retail consolidation, and we are considering other potential buyouts of franchisee businesses or assets. The deal includes the refinances of Agrotorg-Rostovs debt to B.I.N. Bank and trade accounts payable to suppliers and employees. To finance this X5 said it had signed a credit agreement with the bank for 282 million roubles for 1 and a half years.

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