As Lowe’s Companies announces it has entered into a definitive agreement to acquire Québec-based Rona, Caisse de dépôt et placement du Québec has confirmed that it will tender its shares under the offer.
The announcement from the Québec pension fund follows the unanimous recommendation by Rona’s board of directors to accept the offer, the premium of 105% relative to the volume weighted average share value on the Toronto Stock Exchange over the past 30 days ($11.68).
In a news release, la Caisse said it believes the transaction will result in equal or superior economic activity generated by the Rona banners in Québec.
Read: Caisse chimes in on Rona deal
The transaction, which is valued at $3.2 billion, is anticipated to be accretive to Lowe’s earnings in the first year following the close of the acquisition, according to a statement from Lowe’s Companies.
“We are very excited about this transaction as it leverages the strengths of two great companies, positioning us for continued success in Canada’s over C$45 billion and growing home improvement industry,” said Lowe’s chairman, president and CEO Robert A. Niblock.
“Importantly, the transaction also provides Lowe’s with entry into Québec, where Rona is the market leader and we have no presence. We have committed to maintaining Rona’s operations in Boucherville, where we will headquarter our Canadian businesses, and plan to continue to operate Rona’s multiple retail banners and distribution services to independent dealers.”
Read: The Caisse boosts stake in Rona
Robert Chevrier, Rona’s chairman, added: “The team at Lowe’s has presented us with an excellent plan that enables our company to maintain its brand power while at the same time leveraging Lowe’s global presence to build upon and expand our reach.
“With commitments made by Lowe’s to our employees, potential new markets for Canadian manufacturers and product offerings for our independent dealers, this transaction presents the ideal opportunity for the continued growth of our company while delivering an attractive premium for our shareholders.”