Lowe's withdraws $1.8 bn bid for Canadian home improvement retailer Rona

Lowe's Cos Inc today withdrew its C$1.8 billion ($1.8 billion) unsolicited takeover offer for Rona Inc after the Canadian home improvement retailer opposed the merger.

In early August, Quebec-based Rona had revealed that in late July, it had rejected a C$1.8 billion takeover offer from US-based Lowe's, the world's second-largest home improvement chain, saying that the deal was not in best interests of its shareholders. (See: Canadian retailer Rona rejects Lowe's $1.8-bn takeover offer)

The government of Quebec had also criticised the takeover proposal, saying, "This transaction does not appear to be in the interests of either Quebec or Canada."

Some of Rona's dealers threatened to sever ties with Rona, if Lowe's went ahead with the takeover.

"It is unfortunate that the Rona board of directors did not recognise the important economic and commercial benefits of this proposal for its stakeholders and for Canada," said North Carolina-based Lowe's.

Toronto Stock Exchange-listed Rona is Canada's largest distributor and retailer of hardware, home renovation and gardening products with a 25 per cent market share.