Farewell Lowe's: Home Depot makes a key decision in the USA and becomes the new king

The image of the automatic doors opening to welcome us with an intense scent of wood is unmistakable. Many people remember those trips with their father to buy renovation materials as an almost family-like ritual. That experience, so deeply rooted in collective memory, features a giant in the home improvement industry.

The Home Depot is the world's largest retailer in its field, with more than 2,300 stores in the United States, Canada, and Mexico. Recently, the company confirmed an agreement to acquire GMS, a distribution company specializing in construction products, for about $4.3 billion. 

A decision by The Home Depot that transforms the entire sector

The agreement states that SRS Distribution, a subsidiary of The Home Depot, will purchase all outstanding common shares of GMS at $110 each. In total, the enterprise value of the transaction, including net debt, amounts to approximately $5.5 billion. According to the announced plans, this purchase is expected to be completed by the end of January 2026.

Last year, Home Depot had already surprised the market by acquiring SRS Distribution, a Texas-based company, for $18.25 billion, marking the largest purchase in its history. With this new acquisition, it not only expands its portfolio but also consolidates a strategy to attract professionals in the sector who represent a more stable and profitable market. This move strengthens its commitment to attracting customers willing to spend more than the average domestic consumer.

This operation comes after a $5 billion cash offer submitted by QXO, a key competitor in the construction materials business, according to The Street. Home Depot managed to win the bid and thus secured the addition of a strategic partner that will strengthen its distribution and service capacity. This way, the orange brand increases its lead over Lowe’s, its closest rival, consolidating its leadership in the United States.

Growth in times of uncertainty

The company seeks to boost its sales in a challenging context for the real estate market. Rising interest rates and economic uncertainty have slowed consumer demand for home renovations. However, Home Depot focuses on professionals in the sector, who keep a more solid pace of spending even in difficult times.

To protect themselves from global volatility, they have diversified the origin of their products to avoid depending on more than 10% from a single country, considering possible trade tariffs. In addition, the company reaffirmed its forecasts for fiscal year 2025. It anticipates a 2.8% increase in its total sales, despite having fallen short of earnings-per-share expectations in the first quarter of the year.

The CEO of SRS Distribution, Dan Tinker, highlighted the impact of the integration with these words: "Together we'll create a network of more than 1,200 locations. In addition to more than 8,000 trucks capable of making tens of thousands of daily deliveries to job sites." This way, Home Depot is preparing to strengthen its logistics network and service options, establishing itself as the undisputed leader in the home improvement market in the United States.