A major shake up has been announced in the home improvement market.
Lowe’s has announced it’s buying Rona Inc., which is based in Quebec, in a deal worth $3.2 billion, to expand it’s presence on this side of the border.
Last spring, Rona rejected suggestions of a merger with the U-S based company, saying it’s stock was on the road to recovery.
“We believe the time is right to take the next step in the evolution of the RONA family. The team at Lowe’s has presented us with an excellent plan that enables our company to maintain its brand power while at the same time leveraging Lowe’s global presence to build upon and expand our reach. With commitments made by Lowe’s to our employees, potential new markets for Canadian manufacturers and product offerings for our independent dealers, this transaction presents the ideal opportunity for the continued growth of our company while delivering an attractive premium for our shareholders.” – RONA’s Chairman, Robert Chevrier.
“We are pleased with the solid position we have established in key Canadian markets in recent years and the positive reception from our local customers. We look forward to continuing our commitment to the Canadian market and further enhancing our offering to the customers of both Lowe’s and RONA. We have great respect for RONA’s leadership team and RONA’s talented employee base and look forward to working together to take our businesses to the next level.” – Sylvain Prud’homme, President of Lowe’s Canada
Lowe’s is offering shareholders $24 per share in cash, which is about double what the stock was worth at the end of trading Tuesday.