Lowe’s Steps Up Its Canada Operations With RONA Acquisition

Lowe’s (NYSE:LOW) has completed the acquisition of the Canadian home improvement retailer RONA, which will give the company more presence in Canada, and narrow its sales-gap with Home Depot in the country to less than a billion dollars.

The acquisition, valued at $2.4 billion, will not only add approximately $3 billion to Lowe’s top line, but it is expected to give the combined company an established platform to further boost sales in the Canadian home improvement space. In particular, Lowe’s big-box outlets will now have the company of RONA stores under different banners and in different sizes. Having both larger and smaller outlets gives Lowe’s an advantage as some customers are seen preferring the latter.  In comparison, Home Depot has superstores in Canada. This reflects Lowe’s strategy of becoming a more customer-centric business. Lowe’s has been focusing on making itself more customer-centric for the non-expert — a potentially weak spot for Home Depot. This could help Lowe’s gain more Do-It-Yourself customers and help it differentiate itself from Home Depot.

In addition to the inorganic growth from the direct addition of RONA to Lowe’s, the combined company is expected to benefit from more brand awareness in the country, helping it grab more market share in the nearly $35 billion Canadian home improvement market going forward.

Have more questions on Lowe’s? See the links below.

• Home Depot Or Lowe’s- Which Retailer Is Doing Better In 2016?
• Lowe’s Riding On Strong Customer Spending On Home Improvement; Beats Home Depot’s Comps In Q1
• Where Will Lowe’s’ Revenue And EBITDA Growth Come From Over The Next Three Years?
• How Has Lowe’s’ Revenue And EBITDA Composition Changed Over 2012-2016E?
• By What Percentage Have Lowe’s’ Revenues And EBITDA Grown Over The Last Five Years?
• What’s Lowe’s’ Fundamental Value Based On Expected 2016 Results?
• What Is Lowe’s’ Revenue And EBITDA Breakdown?

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