Woolworths, Lowe’s join hands; to take over Danks

Australia's largest retailer Woolworths Ltd has joined hands with Lowe's Companies, a leading US home improvement company, to tap the booming Australian market.

Lowe's investment will represent a 33.3-per cent stake in Woolworths' home improvement multi format offer. Lowe's will provide Woolworths with access to people, intellectual property, systems and global sourcing opportunities.

Lowe's chief executive Robert Niblock said in a statement the deal would tap the underserved $20 billion market in Australia, representing a "tremendous opportunity for the home improvement chain."

As part of this arrangement, Lowe's will own a one-third share of the new home improvement business and will contribute capital accordingly. In the next five years, they plan to secure more than 150 large-format store sites.

Woolworths has more than 3,000 retail outlets in Australia and posted fiscal 2009 revenue of $37 billion (A$49.4 billion). Its brands include Woolworths supermarkets, BIG W discount department stores and Dick Smith consumer electronics stores.

The two companies also said they are entering the $24-billion hardware sector by acquiring Australia's leading hardware distributor, Danks Holdings Ltd, in a A$13.50 per-share deal that would value the company at A$87.8 million.