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Homebase to be rebranded as Bunnings in £340m takeover

Home Retail Group has agreed terms to a £340m takeover of its home improvement and garden division Homebase by Australia’s Wesfarmers, a move which will see it rebranded to Bunnings - a well known DIY chain in Australia and New Zealand.

Although the deal remains subject to shareholder approval, Wesfarmers said it will invest £242m in building the business and a migration to the Bunnings brand over the next three to five years.

Bunnings managing director John Gillam said the deal was a ‘compelling opportunity’, adding: “Homebase has an established and scalable store platform with strong representation in high density areas. The stores are well-sized for the UK market and support warehouse merchandising.”

Homebase is currently the second largest home improvement and garden products retailer in the UK and Ireland – a market which is worth some £38bn.

The deal will likely please Sainsbury's, which has been eyeing a takeover of Home Retail Group following an unsuccessful bid last November.

The grocer's chief executive Mike Coupe issued a 22-page presentation on Sainsbury's plans last week, which focused heavily on the integration of the Argos brand should a deal go ahead rather than loss-making Homebase. Sainsbury's has a "put up or shut up" deadling of 5 February to make another offer.

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