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BEIJING-Home Depot is acquiring its counterpart in China in a move that gives the Atlanta-based company an instant presence in the country. The Home Way currently operates 12 stores in six cities. The transaction has received the necessary Chinese government regulatory approvals and is expected to close by the end of the year. Terms were not disclosed.

Home Depot entered Canada in 1994 and Mexico in 2001 through a combination of acquisitions and organic growth and today holds the number one position in both markets. It opened a business development office in China in late 2004.

Approximately 70% of home improvement spending in China is for the completion of interior space in new homes, according to research by Home Depot, which presents a solid growth opportunity given Home Depot's strength in merchandise and services geared toward finishing out a home. The company did not respond to a request for comment on the number of stores Home Way opened this year and how many new stores can be expected in 2007 and 2008.

Company president and CEO Bob Nardelli said in a prepared statement that Home Way's established management team will allow Home Depot to accelerate its understanding of consumers and retail operations in China's home improvement market, which today is valued at nearly $50 billion and has been growing at a compounded annual rate of 20%.

Home Way, the first "big box" home improvement retail chain in China, was founded in 1996 by Du Sha, its chairman and CEO. The company is headquartered 85 miles southeast of Beijing in Tianjin, one of China's largest cities and a primary development zone for the government. Home Way stores average 90,000 sf of selling space and are currently located in Tianjin, Beijing, Xi'an, Qingdao, Shenyang and Zhengzhou. The company employs approximately 3,000 associates.

Home Depot operates 2,122 retail stores in the U.S., Puerto Rico, U.S. Virgin Islands, Canada and Mexico. Through HD Supply, it also is one of the largest diversified wholesale distributors in the United States. The company employs approximately 355,000 associates.

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