X5 says out of reach for Wal-Mart, Carrefour

X5 Retail Group Chief Executive Lev Khasis talks to Reuters in Moscow September 15, 2009.

MOSCOW (Reuters) - Russia's top grocer by sales, X5 (PJPq.L), is off-limits to international suitors and can boost market share even if international rivals continue their forays into its market, X5's chief executive said on Tuesday.

Lev Khasis said X5's owners would not cede a controlling stake and he believed its chief rival Magnit (MGNT.MM), which outstrips X5 in number of stores but not revenues, was also out of reach to potential buyers.

Wal-Mart (WMT.N) and Carrefour (CARR.PA), one a long-term aspirant and the other a relatively late arrival, are seeking targets in Russia.

"Wal-Mart and Carrefour can only discuss who gets the No. 3 position and who gets No. 4," Khasis told the Reuters Russian Investment Summit.

French retail giant Carrefour has this year opened its first two stores in the country and aims to take a top-three market position in Russia in the long term.

U.S. retail giant Wal-Mart, which has a Moscow office, has hired an executive to explore opportunities in Russia and neighboring markets and been linked to multiple potential conquests, although none of them has so far materialized.

Analysts had predicted global retail giants that missed earlier chances to participate in the 15-year spending boom can now opt to enter at a time when a sharp economic downturn offers a relatively cheap ticket into the Russian retail sector.

Khasis said that local retailers should become stronger as the number of big international players multiplies and pressures them to become more efficient and control prices.

"Those who will fail to do it will be fodder for M&A."

(Reporting by Maria Kiselyova, Robin Paxton, Melissa Akin, Maria Plis, Chris Wickham, Aleksandras Budrys, Alfred Kueppers and Anton Zverev; Writing by Maria Kiselyova; Editing by David Cowell)