Lowe’s is buying a market leader in Canada.
– Transaction unanimously approved by both companies’ Boards of Directors
– Agreement is based on compelling strategic rationale for both companies
– Lowe’s pledges important commitments to RONA’s key Canadian stakeholders
– Lowe’s to locate its Canadian head office in Boucherville, Quebec; Canadian operations to be headed by Sylvain Prud’homme, President of Lowe’s Canada
– Acquisition accelerates Lowe’s growth strategy in Canada
MOORESVILLE, N.C. and BOUCHERVILLE, Quebec, Feb. 3, 2016 /PRNewswire/ — Lowe’s Companies, Inc. (NYSE: LOW) (“Lowe’s” or the “Company”) and RONA inc. (TSX: RON, RON.PR.A) (“RONA”) announced today that they have entered into a definitive agreement under which Lowe’s is expected to acquire all of the issued and outstanding common shares of RONA for C$24 per share in cash, and all of the issued and outstanding preferred shares of RONA for C$20 per share in cash. The total transaction value is C$3.2 billion (US$2.3 billion) (the “Transaction”). The offer represents a premium of 104 percent to RONA’s closing common share price on February 2, 2016 and a 38 percent premium to RONA’s 52-week high of C$17.36. Together, Lowe’s Canada and RONA stores will create Canada’s leading home improvement retailer with 2015 pro forma revenues from Canadian operations of approximately C$5.6 billion. Excluding transaction and integration costs, we anticipate the Transaction will be accretive to Lowe’s earnings in the first year following the close of the acquisition.
The Transaction has been unanimously approved by the Boards of Directors of Lowe’s and RONA and is supported by the management teams of both companies. The Transaction is expected to proceed by way of a plan of arrangement by which Lowe’s would acquire all of the outstanding shares of RONA, subject to RONA common shareholder approval and satisfaction of customary conditions, including the receipt of all necessary regulatory approvals. The RONA Board has received an opinion from Scotia Capital Inc. that the consideration to be received by RONA’s common and preferred shareholders pursuant to the Transaction is fair, from a financial point of view.