Quebec Says No to Lowe's

When we talk about retailers' international expansion, the idea of partnering with or acquiring local companies to gain instant market expertise is often cited as one of the best ways to enter new regions. It turns out that the locals might not be as thrilled about that proposition as the newcomers are.

The Globe and Mail reports that the government of the Canadian province of Quebec is willing to invest its own money in the local home improvement retailer Rona in order to stave off an acquisition by U.S.-based home improvement giant Lowe's.

“As one of the biggest distributors and retailers in Canada, I think [Rona] represents an important strategic interest,” Mr. Bachand said, referring to the tens of thousands of employees as well as hundreds of Canadian manufacturers and suppliers who sell their products to Rona.

He also warned that promises made by foreign entities to maintain head offices and purchasing levels in the country of the takeover target have a tendency to fade over the long term as pressure grows to rationalize and consolidate operations.

Mr. Bachand stopped short of saying his government – through Investissement Québec – would try to block a formal offer from Lowe's.

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