Australian car dealership firm Eagers Automotive said on Wednesday it will acquire a 65% stake in dealership group CanadaOne’s holding company for A$1.04 billion ($687.54 million) to expand into Canada.
The deal, involving entities associated with CanadaOne founder Pat Priestner, comprises A$668 million cash and A$386 million in exchangeable Eagers shares, valuing the Canadian firm at A$2.72 billion including debt.
Upon completion, Eagers will hold a 65% interest in the CanadaOne freehold property-owning companies alongside entities associated with Priestner, among others.
The Australian firm said the acquisition is expected to lift earnings per share by mid-teens, with the deal expected to close in the first quarter of 2026.
“Geographic diversification of earnings for Eagers is a highly strategic move to diversify earnings, shifting reliance away from Australia and into a growing market that is experiencing a rebound in vehicle sales,” said Grady Wulff, a senior market analyst at Bell Direct.
However, Wulff noted risks, including currency exposure, strategic dilution and the Canadian auto sector’s cyclical nature.
Eagers said in a separate announcement that it will partner with Japan’s Mitsubishi Corp to explore collaboration opportunities across new vehicle dealerships, independent used car operations and other mutually beneficial areas.
The Mitsubishi partnership adds strategic value, potentially evolving into deeper collaboration, such as joint ventures or operational tie-ups, particularly in new mobility sectors, Wulff said. “This is yet another strategic move by Eagers following the success of their BYD partnership over the last few years.”
Source: Reuters.com