Lowe’s, the second-largest multibrand home improvement company worth $50 billion, is close to sealing a partnership with Reliance Retail in India. Talks between Reliance and Lowe’s are at a fairly advanced stage, although the proposal hasn’t gone to the boards of the two companies. The plan is to have two companies: a cash-and-carry venture where Reliance is likely to have majority stake and a front-end retail venture, owned and managed by Reliance Retail.
India is going through a consumer boom and foreign retailers are setting up shop by licensing their brands to Indian partners amidst severe protests from local shop owners. Indian laws permit foreign investment up to 51 percent in single-brand retail and up to 100 percent in wholesale business. However, multibrand retailers like Wal-Mart, Home Depot, Tesco, Carrefour, and Lowe’s are not allowed to own and manage stores in India.
Reliance has big plans in the home decor and improvement space given the rapid pace with which Indians are building homes and renovating.