Hardware superstore Lowes has agreed to purchase rival Rona for $3.2billion, creating one of the biggest home-improvement retailers in Canada.
Lowe’s will pay $24 CAD per share for Rona, more than double the stocks closing price of $11.77. Lowe’s also agreed to pay $20 CAD for company’s preferred shares. The boards of both Rona and Lowe’s approved the plan.
The move will create one of Canada’s largest home retailers,
with an annual revenue of $5.6 billion CAD, as they look to capture a greater stake in the still growing Canadian home improvement industry – one currently worth over $45 billion.
A slide in the value of the Canadian Dollar has made it more profitable for Lowe’s to offer a good price for Rona’s stock. While a slide to 72 cent USD means that the offer is double in Canadian dollars, it’s only costing Lowe’s an extra 16 percent per share.
According to a statement from, Lowe’s Chairman and Chief Executive Robert Niblock, the company has identified over $1 billion in opportunities to “further increase revenue and operating profitability in Canada, where it could double operating profitability in five years, according to the statement.”
The move is still awaiting various approvals from different levels of Government.