Homebase bought by Australia’s Wesfarmers
UK DIY chain Homebase has been sold by its owner Home Retail Group to Australian retail giant Wesfarmers for £340m (A$705m; $485.2m).
Wesfarmers already owns Bunnings – one of Australia’s largest suppliers of outdoor living and DIY products.
The 265 UK Homebase sites will be rebranded under the Bunnings banner over the next three to five years.
Wesfarmers said it would spend a further £242m on upgrading the UK stores.
The deal is expected to be wrapped up in the first three months of this year provided shareholders of Home Retail Group agree to the purchase.
Wesfarmers, which owns one of Australia’s biggest supermarket chains, Coles, has estimated that the UK’s home improvement and garden market is worth £38bn. The market leader is Kingfisher’s B&Q chain.
Home Retail Group, which owns the Argos retail chain as well as Homebase, has been put in the spotlight after it emerged that it had rejected a takeover bid from supermarket chain Sainsbury’s last year.
However, Sainsbury’s has made clear that it is only interested in Argos and it had been expected to sell Homebase if a deal was agreed.
Last week, Home Retail Group said its annual profits would be at the bottom end of forecasts following disappointing sales at Argos over the key Christmas period.
Announcing the deal, Home Retail Group chairman John Coombe said: “We are very pleased to have reached agreement with Wesfarmers regarding the sale of Homebase. We believe that this is the best deal for shareholders and for the business.”
Bunnings managing director John Gillam said the acquisition represented a “compelling opportunity to enter the attractive UK home improvement and garden market”.
“Homebase has an established and scalable store platform with strong representation in high density areas,” Mr Gillam said. “The stores are well-sized for the UK market and support warehouse merchandising,” he added.
“We will combine essential local elements with the best of Bunnings to bring customers in the UK and Ireland an exciting new home improvement and garden offer.”
Source: BBC News 18th January 2016