Mooresville, N.C.–based Lowe’s is set to acquire Canadian home-improvement chain Rona for about $2.3 billion. The deal, according to Lowe’s Chairman, President and CEO Robert A. Niblock, speaking in a press release, “leverages the strengths of two great companies, positioning us for continued success in Canada’s over-C$45 billion [$32 billion] and growing home-improvement industry. The strategic rationale of this transaction, for both companies, is very compelling.”
Niblock says Lowe’s stands to benefit from Rona’s “excellent store locations” across Canada. In particular, the deal will get Lowe’s into Québec. There, he said, “Rona is the market leader, and we have no presence. We have committed to maintaining Rona’s operations in Boucherville, where we will headquarter our Canadian businesses and plan to continue to operate Rona’s multiple retail banners and distribution services to independent dealers.”
Leading the Canadian operations will be Sylvain Prud’homme, president of Lowe’s Canada. The combined companies will be tied with The Home Depot as Canada’s biggest home-improvement chain, with some $5.6 billion in annual revenue. Rona currently has 236 owned and 260 franchised stores. Lowe’s has 42 stores in Canada, with plans to increase that to 70 within three years.
Lowe’s says it has identified some C$1 billion worth of opportunities to increase revenue and operating profitability in Canada. These include serving a new portion of the market through Lowe’s expertise in certain product categories — notably appliances — and by means of Lowe’s strengths in omni-channel retail.
