THE HOME DEPOT ANNOUNCES ACQUISITION OF THE HOME WAY
Chinese Home Improvement Retailer Provides The Home Depot With Immediate Presence in Fast-Growing
BEIJING / ATLANTA, Dec. 13, 2006 /PRNewswire/ -- The Home Depot®, the world's largest home improvement retailer, today joined with U.S. Commerce Secretary Carlos Gutierrez and Vice Minister Yi Xiaozhun of the Chinese Ministry of Commerce to announce it has signed a definitive agreement to acquire The Home Way, China’s first home improvement retailer. The transaction has received the necessary Chinese government regulatory approvals and is expected to close by the end of the year. Terms of the deal were not disclosed.
As part of The Home Depot's strategy to expand its business globally, The Home Way provides the Company with an immediate retail presence in China with 12 stores in six cities. Together with The Home Way's knowledgeable, established management team, The Home Depot will accelerate its understanding of consumers and retail operations in the Chinese home improvement market, which today is valued at nearly $50 billion and has been growing at a compounded annual rate of 20 percent.
"This acquisition provides us with a great point of entry in one of the world's largest and fastest-growing home improvement markets," said Bob Nardelli, chairman, president & CEO, The Home Depot. "The Home Way is a strong brand that is already established as a value and price leader among Chinese consumers. We welcome The Home Way's leadership and associates into The Home Depot family, and we look forward to the opportunity to serve Chinese consumers. In addition, we are grateful for the support of this venture by local and national Chinese government officials."
Expansion in China is an important area of growth for The Home Depot. The Company entered Canada in 1994 and Mexico in 2001 through a combination of acquisitions and organic growth and today holds the number one position in both markets. In late 2004, The Home Depot opened a business development office in China to gain consumer insights and evaluate numerous marketplace strategies. The Company believes that The Home Way provides the right entry platform upon which to build a business model that meets the needs of Chinese home improvement customers, while delivering profitable and sustainable growth. Approximately 70 percent of home improvement spending in China is for the completion of interior space in new homes, a solid growth opportunity given The Home Depot's strength in merchandise and services geared to finishing out a home.
"We are pleased to have The Home Way's management team as our partners as we enter China's retail market. The combination of our two companies will benefit Chinese consumers in many ways," said Annette Verschuren, president, The Home Depot Asia/Canada and leader of the Company's retail expansion into China. "As we grow the business internationally, we provide great employment opportunities for our associates in each market, unprecedented value and service for our customers, and tremendous growth opportunities for our vendors."
"The Home Depot and The Home Way share the desire to bring quality home improvement products and services to Chinese customers. We look forward to this exciting new chapter that our two companies will write together," said Du Sha, chairman and CEO, The Home Way. "We believe that we can continue to enhance our customers' experience as we benefit from The Home Depot's expertise in retail, sourcing and supply chain operations."
"We have a high regard for Mr. Du and the culture he helped establish at The Home Way.
His entrepreneurship and leadership will be critical as we further develop our relationships and presence in China," said Verschuren.
About Home Way
Founded in 1996 by Du Sha, its chairman and CEO, The Home Way is headquartered in Tianjin, one of China's largest cities and a primary development zone for the government, located 85 miles southeast of Beijing. The Home Way was the first "big box" home improvement retail chain in China, and its stores average 90,000 square feet of selling space. The Home Way employs approximately 3,000 associates across 12 stores in six cities in China, including Tianjin, Beijing, Xi'an, Qingdao, Shenyang and Zhengzhou.
About The Home Depot
The Home Depot® is the world's largest home improvement specialty retailer, with 2,122 retail stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, 10 Canadian provinces and Mexico. Through its HD SupplySM businesses, The Home Depot is also one of the largest diversified wholesale distributors in the United States, with nearly 1,000 locations in the United States and Canada offering products and services for building, improving and maintaining homes, businesses and municipal infrastructures. In fiscal 2005, The Home Depot had sales of $81.5 billion and earnings of $5.8 billion. The Company employs approximately 355,000 associates and has been recognized by FORTUNE magazine as the No. 1 Most Admired Specialty Retailer and the No. 13 Most Admired Corporation in America for 2006. The Home Depot's stock is traded on the New York Stock Exchange (NYSE: HD) and is included in the Dow Jones industrial average and Standard & Poor's 500 index. HDG
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