Lowes Companies Inc.

Home Improvement Retail • Consumer Cyclical • Mooresville, NC, United States • LOW (NYQ)

704 758 1000 1000 Lowes Blvd., Mooresville, NC 28117, United States

Quarter: Q3 2025 Reported: August 20, 2025 Sentiment: Positive

Lowe's Companies, Inc., together with its subsidiaries, operates as a home improvement retailer in the United States. It provides a line of products for construction, maintenance, repair, remodeling, and decorating. The company also offers home improvement products, such as appliances, seasonal and outdoor living, lumber, lawn and garden, kitchens and bath, hardware, building materials, millwork, paint, rough plumbing, tools, electrical, flooring, and décor. In addition, it offers installation services through independent contractors in various product categories; and extended protection plans and repair services. The company sells its national brand-name merchandise and private brand products to professional customers, individual homeowners, and renters. The company also sells its products through Lowes.com website, as well as through mobile applications. Further, it provides design, distribution, and installation services for interior surface finishes to home builders and property managers. Lowe's Companies, Inc. was founded in 1921 and is based in Mooresville, North Carolina.

Analysis Summary

Lowe's Companies, Inc. (LOW) announced on August 19, 2025, the signing of a Stock Purchase Agreement to acquire ASP Flag Parent Holdings, Inc., which includes its wholly-owned subsidiary, Foundation Building Materials, Inc. (FBM). The total cash consideration for this acquisition is set at $8.8 billion, payable at closing, subject to customary adjustments. This strategic transaction is a significant step for Lowe's, aiming to expand its presence and capabilities in the building materials market.

Financing for the $8.8 billion acquisition and related expenses is intended to come from a combination of cash on hand, a new term loan credit facility, a revolving credit facility, and one or more capital markets transactions, contingent on market conditions. To ensure funding availability, Lowe's has also secured a 364-Day Bridge Facility Commitment Letter for up to $9 billion, though the company does not anticipate incurring indebtedness under this facility for the closing. The consummation of the Transaction is subject to customary closing conditions, notably the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The Purchase Agreement includes termination rights for both parties, with a potential reverse termination fee of $370 million payable by Lowe's under specific circumstances if the deal does not close by August 19, 2026, or extended dates.

Management's commentary, as implied by the investor presentation provided, suggests confidence in the strategic rationale and financial structuring of the deal. The acquisition of FBM is expected to enhance Lowe's competitive positioning, though specific synergies or market trends were not detailed in this 8-K filing. The announcement also included standard forward-looking statements, highlighting various risks associated with the transaction and general economic conditions. This move indicates Lowe's commitment to growth and market leadership within the home improvement and building materials industry.

Key Highlights

• Lowe's to acquire Foundation Building Materials, Inc. (FBM) for $8.8 billion in cash.
• Acquisition consideration of $8.8 billion to be paid at closing.
• Financing planned through cash on hand, term loan, revolving credit, and capital markets transactions.
• Secured a $9 billion 364-day bridge loan facility as a backup, not expected to be utilized.
• Transaction subject to customary closing conditions, including Hart-Scott-Rodino antitrust approval.
• Purchase Agreement includes a potential $370 million reverse termination fee for Lowe's under specific conditions.
• Investor presentation provided to analysts and investors regarding the transaction.

Financial Metrics

guidance

Stock Performance (90 Days)

Data through Dec 30, 2025

Positive Signals

• Strategic acquisition of a significant business (FBM) for $8.8 billion.
• Comprehensive financing plan in place, including a bridge facility as a safeguard.
• Commitment to growth and expansion in the building materials sector.
• Management provided an investor presentation, indicating transparency and confidence in the deal.
• Clear timeline and conditions for the transaction, including termination provisions.

Risks & Concerns

— Failure to obtain necessary regulatory approvals (e.g., Hart-Scott-Rodino).
— Failure to satisfy other customary closing conditions for the transaction.
— Risk of litigation and/or regulatory actions related to the Transaction.
— Potential adverse effects to the businesses of Lowe's or FBM during the pendency of the Transaction.
— Possibility that anticipated benefits and synergies of the Transaction are not realized, or integration problems arise.