X5 ACQUIRES 8.45% STAKE IN A5

X5 acquires 8.45% stake in A5 pharmacy chain

Amsterdam, 16 May 2011 - X5 Retail Group N.V., Russia's largest retailer in terms of sales (LSE ticker: "FIVE"), today announced that it has completed the acquisition of 8.45% stake in A5 pharmacy chain, one of Russia's leading pharmacy retailers. Х5 also retains the right to purchase up to 100% of the chain until the end of 2012.

Andrei Gusev, X5 Retail Group CEO, commented:

"Our number one priority is to strengthen X5 Retail Group's core business efficiency and we have no plans to expand into new market segments at this time. We received an 8.45% interest in A5 pharmacy chain for a nominal price in accordance with the terms of its agreement with A5 pharmacy chain. In deciding whether or not we will exercise our option to acquire 100% of the chain until 2012, we will evaluate all factors including pharmacy sector attractions for X5, pre-investment due-diligence on the business and estimated return on invested capital in comparison with investment opportunities in our core business."

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A5 Pharmacy Chain

Founded in 2006, A5 Pharmacy Chain has established itself as a leading brand in the Russian pharmacy sector with a strong track record of organic growth. Today A5 operates 713 pharmacies and present in 6 regions of the European part of Russia. A5's net sales for the full year 2010 totaled RUR 5 213 mln.

The chain comprises different formats of pharmacies, from pharmacy kiosks to premium stores in the center of Moscow. A5's well-thought out strategy and strong execution of its customer value proposition have established the chain's leadership and won awards and recognition in independent industry rankings.

The company is owned by members of the A5 management team. 

Note to Editors:

X5 Retail Group N.V. is Russia's largest retailer in terms of sales. The Company was created as a result of a merger between Pyaterochka (soft discounter chain) and Perekrestok (supermarket chain) on 18 May 2006. In June 2008, X5 acquired Karusel hypermarket chain and substantially strengthened its position in hypermarket format.

As at 31 March 2011, X5 had 2,545 Company-managed stores located in Moscow,St. Petersburg and other regions of European Russia, Urals and Ukraine, including 1,472 soft discount stores, 303 supermarkets, 71 hypermarkets, 47 convenience stores and 652 acquired Kopeyka stores (including 45 stores already rebranded as Pyaterochka).

As at 31 March 2011, X5's franchisees operated 690 stores across Russia.

For the full year 2010, net sales totaled USD 11,280 mln, EBITDA reached USD 844 mln, and net profit amounted to USD 271 mln. For the first quarter 2011, net retail sales totaled USD 3,826 mln.

X5 Shareholder structure is as follows: Alfa Group - 47.9%, founders of Pyaterochka - 19.9%, X5 Management - 1.8%, treasury shares - 0.1%, free float - 30.3%.

Forward looking statements:

This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the fact that they do not only relate to historical or current events. Forward-looking statements often use words such as" anticipate", "target", "expect", "estimate", "intend", "expected", "plan", "goal" believe", or other words of similar meaning.

By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, a number of which are beyond X5 Retail Group N.V.'s control. As a result, actual future results may differ materially from the plans, goals and expectations set out in these forward-looking statements.

Any forward-looking statements made by or on behalf of X5 Retail Group N.V. speak only as at the date of this announcement. Save as required by any applicable laws or regulations, X5 Retail Group N.V. undertakes no obligation publicly to release the results of any revisions to any forward-looking statements in this document that may occur due to any change in its expectations or to reflect events or circumstances after the date of this document.