Home Depot has received final antitrust clearance for its $5.5 billion acquisition of GMS Inc., a specialty building products distributor. The company announced on Friday that the Canadian Competition Bureau issued a “no-action” letter, allowing the deal to proceed in Canada, where both companies operate.
With this approval, Home Depot says it has met all antitrust-related conditions for the acquisition. Earlier, the U.S. Department of Justice ended its waiting period for antitrust review ahead of schedule, according to an August 21 statement from Home Depot.
The home improvement retailer also extended its tender offer for GMS until 11:59 p.m. on September 3; the previous deadline was August 22.
Home Depot aims to expand its business with professional contractors at a time when high interest rates and economic uncertainty have led homeowners to delay large renovation projects. Last year, Home Depot made its largest acquisition by purchasing SRS Distribution for $18.3 billion. SRS is a distributor specializing in roofing, landscaping, and pool supplies.
SRS plans to acquire GMS, which was founded in 1971 and has grown into a major distributor of drywall, ceilings, steel framing, and other specialty building materials.
Executives at Home Depot say the combined businesses will simplify purchasing for contractors by reducing their number of suppliers and deliveries. On the company’s second-quarter earnings call, Ted Decker, chairman, president and CEO of Home Depot said: “GMS will be additive to our organic efforts to better serve pros working on complex projects, enabling us to offer a deeper and broader assortment of interior building products and services, as well as additional fulfillment options.”
Decker added that together SRS and GMS would have a network of 1,200 locations, 3,500 sales associates and nearly 8,000 trucks.
Home Depot faces competition from Lowe’s in serving professional customers. On August 20 Lowe’s announced an agreement to buy Foundation Building Materials for $8.8 billion; Foundation is also a top distributor of drywall, metal framing and ceiling systems.
“We’ll never get 100% of someone’s spend,” Decker said about contractor clients. “But the more we can consolidate activity for them, particularly on a job site … that’s where they told us we have a right to win.”
