Kingfisher, Europe's biggest home improvement retailer, has launched a €275m takeover bid for France's Mr Bricolage, moving to strengthen its position in its most profitable market.
The firm runs market leader B&Q in Ireland and the UK and already trades as Castorama and Brico Depot in France.
It said it had entered into exclusive negotiations with the main investors of Mr Bricolage to buy their shareholdings.
It has proposed to acquire 41.9% of the share capital of Mr Bricolage from the Association Nationale des Promoteurs de Faites Le Vous-Mene (ANPF), a group of franchisees, and 26.2% from the Tabur family, at an agreed price of €15 a share.
Subsequently, it would make a mandatory offer to acquire the shares held by the minority shareholders at the same price. At this level, and including net debt, the overall enterprise value of the deal would be around €275m.
Kingfisher said the whole process was likely to take until the end of its 2014-15 financial year.
Under the deal, also conditional upon competition clearance, Mr Bricolage's existing franchisee and affiliate network would be maintained and its members offered improved commercial terms.
Kingfisher entered into a non-binding memorandum of understanding with Mr Bricolage's principal shareholders yesterday.
That marked the start of exclusive negotiations during which the operating businesses of Mr Bricolage and of Kingfisher in France will meet with their respective works councils and the improved commercial terms will be proposed to the franchisees of Mr Bricolage.
Depending on the outcome, a binding agreement would be entered into.