The companies argue that together they will create the largest chain of home improvement retail in Canada with Canadian operations revenue estimated at approximately CAN $ 5.6 billion in 2015.
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Lowe’s will pay about C$24(US$17.15) for each outstanding common share and C$20 for each outstanding preferred share of RONA.
The transaction, whose total value amounted to CAN $ 3.2 billion, was unanimously approved by the boards of directors of both companies according to what their statement said.
“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.
The companies say the combination will make Lowe’s the Canadian leader among home improvement retailers.
Lowe’s has identified over C$1 billion of opportunities to further increase revenue and operating profitability in Canada. Stikeman Elliott LLP served as legal counsel to Lowe’s in Canada, while Hunton & Williams LLP did so in the U.S. Scotia Capital Inc. was Rona’s financial adviser and Norton Rose Fulbright Canada LLP its legal counsel.
Chevrier also that Lowe’s has made commitments to the Canadian company’s employees, suppliers and independent dealers.
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Lowe’s has had limited operations in Canada since 2007, with stores across Alberto, Ontario, Saskatchewan and British Columbia. Lowe’s said that it expects to close on the acquisition within the second half of this year.
