Kingfisher buys 25% German stake

KINGFISHER has unveiled a complex deal giving it a toehold in the German DIY market, which is the largest in Europe. The group, which owns B&Q and Comet, is buying into Germany's leading DIY warehouse operator Hornbach. The move could lead eventually to Kingfisher taking complete control of the chain.

Initially, the British retailer is buying a 25% stake plus voting rights in Hornbach Holdings, a family-controlled company that owns 80% of quoted company Hornbach-Baumarkt. This has 74 sites in Germany and the highest sales per store in its sector.

Kingfisher is not disclosing the price of this German treasure but compound sales growth has been 13% over the past five years and the net asset value of the business is £223m. Sales to last February were £975m and net income was £16.8m.

Kingfisher chief executive Sir Geoff Mulcahy said: 'We have the highest respect for what Otmar Hornbach has achieved in building such an outstanding business. '

Hornbach said: 'The international growth of the Hornbach Group will acquire a new quality and additional dynamism through the commitment of Kingfisher.'

The deal allows Kingfisher first refusal if Hornbach wants to sell its shares.