Bunnings managing director John Gillam is pushing the brand in the UK market.
BUNNINGS owner Wesfarmers is making its first overseas foray after striking a deal to buy the Homebase hardware chain in Britain from Home Retail.
Wesfarmers, which also owns supermarket chain Coles, says it has completed due diligence on Homebase and transaction documents for the £340 million ($706 million) deal are being finalised.
The two companies have been in talks since September and signed an exclusivity agreement in early December.
Homebase is the second biggest home improvement and garden retailer in the UK and Ireland, with 265 stores and reported revenue of £1.46 billion and operating profit of £19.8 million last financial year.
“The UK home improvement and garden market is an attractive and growing market,” Wesfarmers said in a statement this morning.
It added that the Homebase acquisition would provide an established and scalable platform for the market.
The acquisition would be the first step towards building a new Bunnings-branded business in the UK over three to five years, the company said.
Wesfarmers’ Bunnings business is the dominant hardware retailer in Australia, while Coles as the second biggest supermarket chain has easily outperformed larger rival Woolworths in recent years.
The cash-rich company has been eyeing acquisitions in the past few years to drive growth.
Earlier, Home Retail confirmed the talks saying it was looking to sell Homebase so it could focus on its Argos retail business, which contributes about six times as much operating profit as Homebase.
UK supermarkets operator Sainsbury had approached Home Retail in November to buy the entire business, with its interest mainly focused on Argos.
Home Retail said selling the home improvement business would significantly improve its balance sheet, mainly by reducing its store leasing liabilities.
It plans to return £200 million to shareholders from the sale proceeds.
AAP
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