WHAT YOU NEED TO KNOW ABOUT THE LOWE'S-RONA DEAL
U.S. home improvement giant Lowe’s Cos. has struck a $3.2-billion deal to acquire Quebec-based Rona Inc., following an unsuccessful takeover attempt in 2012. Here's what you need to know about the deal. (For the full story: http://trib.al/yZZmpV5)
- •The dealLowe’s is offering Rona’s investors $24 in cash per share, and $20 for each preferred share. The deal is valued at $3.2-billion, or $2.3-billion (U.S.), a 104-per-cent premium to the closing share price Tuesday. So far, the deal has been unanimously approved by Rona’s board, and its largest shareholder, the Caisse de dépôt et placement du Québec, said it would tender its shares. Quebec Minister of the Economy, Sciences and Innovation, Dominique Anglade, saw no immediate reason to block the deal.
- •What happened last timeIn 2012, Rona offered $14.50 per share for a deal value of $1.8-billion, or $1.86-billion (U.S.). This represented a premium of 36.7 per cent. The offer was rejected by Rona’s board, shareholders balked and the threat of a takeover provoked a political outcry during Quebec’s election campaign. Lowe’s walked away and Rona’s largest investors put pressure on the company to restructure. The CEO left shortly after.
- •The historyLowe’s grew from a small hardware store in North Carolina in 1946 to a U.S. retail giant; it began operating in Canada in 2007. Rona was founded in Quebec in 1939 when a group of small hardware stores banded together.
- •The footprintRona has 496 stores in various formats across Canada, with 238 of them located in Quebec. Lowe's has 42 stores and plans to open 12 more in the next two years.
- •The main attractionsLowe’s wants to scale up and enter into Quebec, which accounts for nearly a quarter to the country’s home improvement market. Lowe’s sees the opportunity to build out Rona’s online offerings and sell appliances through its stores. Lowe’s plans to headquarter its Canadian business in Rona’s home base of Boucherville, Que., and maintain Rona’s brands. Lowe’s will retain the “vast majority” of Rona’s current employees, including keeping “key executives.”