The boards of Lowe’s Companies and RONA have agreed to the sale of Rona to the U.S. home improvement giant.
The total transaction value is C$3.2 billion (US$2.3 billion).
Lowe’s will retain the RONA stores and brand, and most staff. The owner of RONA Penticton declined to comment on the purchase.
Lowe’s Canada and RONA stores expect 2015 revenues from Canadian operations of approximately C$5.6 billion.
“We are very excited about this transaction as it leverages the strengths of two great companies, positioning us for continued success in Canada’s over C$45 billion and growing home improvement industry. The strategic rationale of this transaction, for both companies, is very compelling,” said Lowe’s chairman, president and CEO Robert A. Niblock.
“The transaction is expected to accelerate Lowe’s growth strategy by significantly expanding our presence in the Canadian market through the addition of RONA’s attractive business and excellent store locations across the country,” added Niblock. “Importantly, the transaction also provides Lowe’s with entry into Quebec, where 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. With our shared customer-centric values and a steadfast commitment to the Canadian market, we expect to generate significant long-term benefits for shareholders, customers, vendors, employees and the communities we serve.”
RONA’s chairman, Robert Chevrier, added, “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.