We advised Rona Inc. in its $3.2 billion sale to Lowe’s Companies Canada ULC, the Canadian subsidiary of US-based Lowe’s Companies Inc.
This merger was closely reviewed by the Competition Bureau, which issued extensive supplementary information requests. The competition analysis involved actual or potential overlaps in close to 60 geographic markets and across close to 20 product categories.
The transaction also required approval under the Investment Canada Act, and was the first major transaction to be reviewed by the then-new Liberal government. The transaction was politically sensitive as an earlier unsolicited attempt by Lowe’s to acquire Rona had been very poorly received by the provincial government in Quebec as well as major shareholders of Rona, and Lowe’s ultimately withdrew its offer. As a result, considerable time was devoted in this transaction to negotiating the Investment Canada Act strategy, and we successfully pressed Lowe’s to make significant up-front commitments that helped mitigate the regulatory risk from an Investment Canada standpoint.