Woolworths has added more stores to its emerging hardware chain by agreeing to pay $40 million to acquire the small group of five hardware stores owned by the struggling Gunns timber and forestry group.
It will also acquire another Tasmanian group, the Becks Timber & Hardware business.
Danks is jointly owned by Woolworths and America’s Number 2 hardware chain, Lowe’s Companies.
Gunns said yesterday it had agreed to sell its hardware retail business to Blue Mountains Hardware, a wholly-owned subsidiary of Danks.
Gunns put the business up for sale a month or so ago after a strategic review in the wake of the nasty slump in interim profit.
Gunns said the agreement came after a competitive bid process, which assessed offers from various parties.
All employees at all of the retail sites will be retained under this transaction, Gunns chief executive Greg L’Estrange said in a statement.
In a separate statement, Danks said the acquisition included one timber joinery centre, one truss manufacturing plant and a support office.
"As part of the acquisition, Danks will make offers to retain all employees of the Gunns business, including support staff and management," the company said.
General manager of Danks, Graeme Danks, said the acquisition would give consumers in the Tasmanian hardware sector more choice and help to maintain the employment of 283 people.
In the same announcement, Danks said it had agreed to acquire the Becks Timber & Hardware business.
‘‘All Becks employees will receive offers of employment,’’ Danks said.
Woolworths and Lowe’s are taking aim at Wesfarmers’ market leading Bunnings.
The two groups have plans for 150 warehouse-type hardware stores that will compete with Bunnings and with Danks’s independent retailers.
Danks’s independent retailers include Home Timber & Hardware, Thrifty-Link Hardware, and Plants Plus stores
Guns shares were unchanged on the day at 35c, Woolies shares rose 35c to $26.73.
