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The merger between the two biggest diy retail chains in the UK and France creates a massive new player, writes Bernard Anghelides. But, despite a few misgivings from suppliers on the other side of the channel, for the UK diy market it's business as usual
The marriage of B&Q and Castorama may have surprised some, but was not exactly a bolt from the blue. In August, The Daily Telegraph reported that Kingfisher was in talks with Castorama about cooperation between B&Q and its French equivalent, short of a merger. Shortly afterwards, DIY Week revealed that Kingfisher had made an offer.
Subsequently Kingfisher confirmed that it had agreed to take a majority stake in the French diy retailer.
The announcement sent Kingfisher shares up in London. Castorama's Paris share price also rose - but three days later slumped by 10% on the Bourse. French newspaper le Echo said investors were massively selling shares, either to make a profit or because they mistrusted Kingfisher.
The reaction from the diy industry was hardly noticeable.
Rival shed chains in the UK claimed it was business as usual.
"I don't see how this merger significantly affects the UK market," said Clive Jones, commercial director at the BHHMA. "They {B&Q and Castorama} might be able to buy some products on a combined basis. But the markets are in very many ways quite different.
"Designs of hardware and tools are different in the UK and France; and different again in Germany." And even if a UK company won a Castorama contract, "would they have, say, the right moulds and dies?"
He admits there are some cross-overs, but at present, he says, the BHHMA members are more worried by the general economic conditions and the strength of sterling sucking in imports, than by any tie-up between UK and French chains.
The BHHMA's French equivalent, Union Nationale des Industries du Bricolage et du Jardinage (UNIBAL), sees the merger as a double-edged sword.
"There have been two main reactions to the deal," UNIBAL international relations manager Serge Hanoca told DIY Week. "Some companies see this as a link with B&Q. There is, however, a problem for companies which deal with both Castorama and B&Q and have different commercial agreements with each. Some companies see...