The purchase is Home Depot's biggest ever and will double the size of its supply division to $12 billion in revenue, allowing the company to continue its drive to win more professional customers. Chief Executive Officer Robert Nardelli has made three acquisitions in the past year to expand beyond do-it-yourselfers.Bloomberg speculates that the move is at least partially an attempt to diversify because of incursions into its core business by Lowe's:
Home Depot is making acquisitions as it has become more challenging to find new store locations and sales growth lags behind Lowe's Cos., the second-largest home-improvement retailer.
Home Depot has about 2,000 stores, while Lowe's has about 1,175 and is still expanding into large U.S. cities. Home Depot has boosted sales an average of 12 percent a year over the past five years, compared with an average gain of 18 percent at Mooresville, North Carolina-based Lowe's.
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