Metcash has received approval to acquire Woolworths Ltd’s Home Timber & Hardware (HTH) banner, in a move that creates a major new player in the Australian hardware retail market.
Metcash will acquire HTH for A$165m and merge it with its own Mitre 10 banner, creating a behemoth with sales of A$2.2bn.
Woolworths currently operates 43 company-owned Home stores and 363 independent stores, while Metcash has around 400 mostly independent-owned Mitre 10 outlets. Home Timber also supplies goods to 865 unbranded stores. Metcash plans to shut down Home Timber’s distribution centre in Dandenong (Victoria), as well as two loss-making stores.
Ian Morrice, CEO of Metcash, noted: “This increased scale, together with the opportunity to realise significant efficiencies, will enable us to be more competitive and deliver a better outcome for both our hardware retailers and their customers.”
The sale is part of Woolworths Ltd’s exit strategy for its home improvement operations – the group is also looking to sell off its Masters banner, which it launched as a joint venture with US group Lowe’s.