Lowe’s to buy Rona in $2.28 bil­lion deal

The Pak Banker - - BUSINESS -

WASH­ING­TON: U.S. home im­prove­ment re­tailer Lowe's Com­pa­nies Inc said it would buy Rona Inc in a deal val­ued at C$3.2 bil­lion ($2.28 bil­lion) to en­ter Canada's Que­bec prov­ince, where Rona is the mar­ket leader. Lowe's will pay C$24 per share in cash for Rona's com­mon shares, more than dou­ble the stock's clos­ing on Tues­day. The deal also in­clude a C$20 per share cash pay­ment for Rona's pre­ferred shares. Lowe's Canada and Rona will cre­ate a re­tailer with 2015 pro-forma rev­enue of about C$5.6 bil­lion, Lowe's said on Wed­nes­day. Lowe's said the deal, which will add to its earn­ings in the first year af­ter the deal closes, would help in­crease rev­enue and op­er­at­ing prof­itabil­ity in Canada by more than C$1 bil­lion. Only 40 of Lowe's 1,850 stores in North Amer­ica were lo­cated in Canada as of March. Rona, on the other hand, has 700 stores across Canada, ac­cord­ing to its web­site.

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