Wesfarmers acquires Homebase in £340m deal
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Wesfarmers, the Australian retail-to-coal mining conglomerate, is to acquire British DIY chain Homebase for A$705m (£340m).
It emerged last week that Wesfarmers had made an offer for the 265 store UK chain, currently owned by Home Retail Group.
Shares in Wesfarmers rose as much as 4 per cent to A$40.90 on Monday.
Wesfarmers started life as a Western Australian farmers’ co-operative in 1914 but is now one of Australia’s largest companies, owning coal mines and chemical plants, department stores, hardware chain Bunnings and Australia’s second-biggest supermarket, Coles. However the acquisition of Homebase will mark its first step beyond Australia and New Zealand.
It said in a statement on Monday that it initially intends to focus on improving the performance of Homebase, before building a “new Bunnings-branded business over three to five years,” without specifying further details.
Like-for-like sales at Homebase rose 5 per cent in the 18 weeks to January 2, according to a recent trading update. However Home Retail Group has been bearish on the home improvement market and has been culling stores over the past year.
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