Lowe's to Acquire Foundation Building Materials for $8.8 Billion, Strengthening Its Contractor Division

In a move to bolster their presence in the lucrative professional builder market, valued at around $250 billion, Lowe's Cos and Home Depot have been making strategic acquisitions.

Lowe's recently announced its plan to acquire California-based Foundation Building Materials for approximately $8.8 billion in the fourth quarter of 2025. This acquisition follows Lowe's purchase of Artisan Design for $1.33 billion in April.

The acquisition of Foundation Building Materials, which supplies construction products to around 40,000 professional customers through more than 370 locations in the U.S. and Canada, is expected to significantly enhance Lowe's Pro offering, according to Lowe's CEO Marvin Ellison.

Meanwhile, Home Depot, too, has been active in the acquisition market. In late June, the company decided to buy specialty building products distributor GMS for about $4.3 billion.

The acquisitions come as both companies aim to capitalise on continued spending on smaller-scale maintenance projects and demand from professional contractors in the second half.

Lowe's reported earnings of $4.33 per share on an adjusted basis in the second quarter, exceeding estimates of $4.24. The company also raised its annual sales forecast and now expects to generate sales between $84.5 billion and $85.5 billion, up from its previous expectation of $83.5 to $84.5 billion.

Home Depot, on the other hand, did not revise its annual forecasts in its latest announcement.

J.P.Morgan analyst Christopher Horvers wrote that the urgency of acquisition in the pro distributors market is escalating, as both Lowe's and Home Depot seek to solidify their positions in the market.

Lowe's DIY sales make up about 70% of its annual revenue, indicating that the company is increasingly focusing on the professional market.

The acquisition of Foundation Building Materials is subject to certain regulatory approvals and is expected to be financed through a mix of short-term and long-term debt.

The news of the acquisitions sent Lowe's shares rising 2% to US$261.70 in early trading, while Home Depot's shares have been relatively stable.

In conclusion, Lowe's and Home Depot are aggressively pursuing acquisitions to strengthen their presence in the professional builder market. The acquisitions of Foundation Building Materials and Artisan Design by Lowe's, and GMS by Home Depot, are expected to significantly enhance their offerings and position them well for growth in the market.